- Original Poster
- #1
I've been running a business as a sole trader selling primarily on Ebay for a few years now (a small time affair, well below the VAT threshold for turnover), and am seeking to improve my accounting practices, without making them too onerous. Since virtually all of my activity goes through Paypal, I have been using my Paypal activity history logs as the basis of accounting in previous years, as they can be outputted to a spreadsheet from which turnover and profit can easily be calculated. But I am now wondering if this is adequate. In particular:
1) Do I need to have some stock coding system to be able to track individual items as they come in and go out again, or is this not necessary?
2) The HMRC website suggests I need to take into account sums that I owe and am owed, but which have not yet been paid, when reporting, and also the value of my stock - but I have simply been reporting the my total applicable incomings (for turnover) and the difference between these and applicable outgoings (for profit). Am I in fact using the 'cash basis' here, or traditional accounting? (I have been describing myself as the latter, but am now not sure).
3) Is there anything else that seems to be glaringly missing from my methods that I should be doing?
Sorry if these questions seem rather basic, but I have no real accountancy experience to draw on.
1) Do I need to have some stock coding system to be able to track individual items as they come in and go out again, or is this not necessary?
2) The HMRC website suggests I need to take into account sums that I owe and am owed, but which have not yet been paid, when reporting, and also the value of my stock - but I have simply been reporting the my total applicable incomings (for turnover) and the difference between these and applicable outgoings (for profit). Am I in fact using the 'cash basis' here, or traditional accounting? (I have been describing myself as the latter, but am now not sure).
3) Is there anything else that seems to be glaringly missing from my methods that I should be doing?
Sorry if these questions seem rather basic, but I have no real accountancy experience to draw on.
