Using Wordpress & Woocommerce For Invoicing/Accounting

[Paul Kelly ICHYB]

My event business is relatively small, under the VAT threshold, and I use cash accounting.

I use Kashflow, however, only for raising exhibitor invoices, chasing & taking payments and event/project tracking - I do not use it for my accounts. Invoices tend to be done in bulk (100+) 5 times a year and then 5 or so a month in between. Separately, I sell event tickets, but this system is already in place.

Accounts are done off the bank transactions by my accountant.

Because I am a stingy sod and begrudge paying £300 a year for a service that I don't use the full features of, I was thinking of using Woocommerce to raise invoices and get paid.
I can raise the order or people can self-serve. They will pay over the phone or via a link on the invoice & email.

The only thing the WP/WC setup will not do it allow me to set up a payment date (I can add terms e.g. 30 days) and then chase late payments. I am not stressed about this, as I can get a developer to make this for me and still save in the first year!

What are your thoughts on this setup, that would work in many different instances/businesses, especially in relation to MTD?


A business specific advantage of this is that I can now add a system that removes the need for me to send 100 welcome letters out for each event, saving close to £1k a year and I can scan people when they arrive, which makes me even more keen to do this.



Separate to this, I am developing a UK-focused WP accounting plug in that will be MTD compliant and work with WooCommerce, but this would be overkill for what I want here (but will be added in).

 

[MyAccountantOnline]

Sounds like a lot of hard work to save a few pounds especially when you can get MTD compliant software which deals with invoicing free of charge.

If you are looking to save money why not use software which imports your bank transactions and do your own bookkeeping?

 

[Paul Kelly ICHYB]

Saving money is a (small) reason, especially as it goes beyond just the accounting software (cost & time), however, why should I use accounting software when my accounts are done from my bank statements?

@MyAccountantOnline Can you recomend a free MTD software that does invoicing?

 

[Ozzy]

Reminds me of that time I had a guy working for me (Ray his name was) who was in charge of stock and ordering, and he called me over to his desk one day really pleased with himself. He'd managed to save us ~5p per pen from our supplier. He'd spent all morning on the job, negotiating for cheaper f'kin pens!

I then calmly explained to him that he'd cost me more that morning in hourly wages than he'd saved the company on the price of pens.

For everything I do I assign my hourly rate to it. If it works out cheaper to pay someone else to do it, compared to what revenue I could bring in focused elsewhere, then I get someone else to do said thing.

 

[Paul Kelly ICHYB]

For me, implementing the system is a couple of hours (finding and installing plugins and checking it all works as I want). Entering invoices is about the same as the accounts system.

The time and additional cost savings I make come from not having to prepare (mail merge) 120 letters 5 x a year (along with postage cost) is a bonus. In addition, I can reduce potential fraud (which is minimal) by sending pdf's with QR codes I scan when exhibitors (that 130) come to the event.

In any case, there are several invoicing-only applications out there that have a cost (similar to some accounting software!), which I have found out woocommerce can generally replicate and, with the power of WP &WC, can be developed to meet some specific business needs.

Also, when I need to go to MTD, many/most accounts systems can be bridged to Woocommerce.

 

[MyAccountantOnline]

Saving money is a (small) reason, especially as it goes beyond just the accounting software (cost & time), however, why should I use accounting software when my accounts are done from my bank statements?

@MyAccountantOnline Can you recomend a free MTD software that does invoicing?

Even if you only use accounting software to record payments and receipts (not making full use of it) it still serves important purposes.

Bank statements show what’s gone in and out, but accounting software creates a searchable, categorised record of transactions. This makes the year end accounts quicker and less expensive.

It also helps with day to day monitoring - you can see trends in income and expenditure, track how the business is performing over time, and spot missing income, unusual expenses, or duplicated entries during the year rather than retrospectively. It also enables you to monitor turnover monthly for VAT registration purposes, reducing the risk of late registration penalties.

It also ensures compliance with Making Tax Digital, as records and submissions must be maintained and filed using MTD-compatible software.

My recommendation for free MTD compliant software which handles invoicing very well (with lots of options) is FreeAgent which is free if you use NatWest, Mettle, RBS or Ulster Bank.

 

[Paul Kelly ICHYB]

Bank statements show what’s gone in and out, but accounting software creates a searchable, categorised record of transactions. This makes the year end accounts quicker and less expensive

I download an annual bank spreadsheet and identify/describe all transactions (you can do that on many bank accounts now).

It also helps with day to day monitoring

I am pretty anal with monitoring things and do a cost analysis on an event by event basis. All make all payments, so nothing erroneous gets through.

It also ensures compliance with Making Tax Digital

Totally agree, but in my case (and millions? of others) as I am not VAT registered, compliance, at the moment, isn't necessary.

Nicola, I am fully sold on using accounting software, especially when it comes to MTD, however, over the past year or two, also believe that, in some cases, it isn't necessary (for me, on this particular company, that was a revelation).

 

[MyAccountantOnline]

I download an annual bank spreadsheet and identify/describe all transactions (you can do that on many bank accounts now).


I am pretty anal with monitoring things and do a cost analysis on an event by event basis. All make all payments, so nothing erroneous gets through.


Totally agree, but in my case (and millions? of others) as I am not VAT registered, compliance, at the moment, isn't necessary.

Nicola, I am fully sold on using accounting software, especially when it comes to MTD, however, over the past year or two, also believe that, in some cases, it isn't necessary (for me, on this particular company, that was a revelation).

How do you monitor your monthly turnover to make sure you dont exceed the VAT registration threshold?

Are you confusing MTD for VAT and MTD for Income Tax?

 

[Paul Kelly ICHYB]

I look at the money going into my account and the moving annual turnover.

This business that I refer to is Ltd.

 

[MyAccountantOnline]

I look at the money going into my account and the moving annual turnover.

....

Be careful with that if you have any deductions taken from the monies banked.

It's a mistake I've seen so often as an accountant where people use sales banked and deductions are made from the amounts banked.

 

[MyAccountantOnline]

..

This business that I refer to is Ltd.

How do you calculate your company profits to see what dividends can be paid if you dont keep proper accounting records?

 

[Paul Kelly ICHYB]

Be careful with that if you have any deductions taken from the monies banked.

Good point! Luckily, the only deductions are Stripe and PP, which, if added, still wouldn't get me near the threshold!

How do you calculate your company profits to see what dividends can be paid if you dont keep proper accounting records?

I am a bit worried by that question.... Sales-costs=GP in its basic form, but my account also considers available deductions, exemptions etc. Am I missing something?

I appreciate that CT needs managing, which the accountant covers (and last years is also on the bank account) , but I am not an employee, so no PAYE.

 

[MyAccountantOnline]

Good point! Luckily, the only deductions are Stripe and PP, which, if added, still wouldn't get me near the threshold!


I am a bit worried by that question.... Sales-costs=GP in its basic form, but my account also considers available deductions, exemptions etc. Am I missing something?

I appreciate that CT needs managing, which the accountant covers (and last years is also on the bank account) , but I am not an employee, so no PAYE.

Whilst it may not be an issue now, unless you keep a full record of the monthly fees deducted from your sales checking the rolling turnover figure needs to be done very carefully - honestly, you'll save yourself a lot of potential hassle by using some accounting software recording income and fees deducted properly. I've seen it so many times.

Sales minus direct costs = Gross Profit.

Gross profit minus overhead costs = Net profit before tax.

If you are paying interim dividends, you need proper accounting records recording income receivable and expenses due (not just income received and payments made) - that's the only way you can calculate the net profit and an estimate of the Corporation tax due and ascertain what can be paid as dividends.

Any reason why you dont take a salary from your company? Generally for most small company directors/shareholders a combination of salary and dividends is most tax efficient.

 

[Paul Kelly ICHYB]

Whilst it may not be an issue now, unless you keep a full record of the monthly fees deducted from your sales checking the rolling turnover figure needs to be done very carefully - honestly, you'll save yourself a lot of potential hassle by using some accounting software recording income and fees deducted properly. I've seen it so many times.

Good point. Whilst I have all of the records, they are accessible through statements etc.

Any reason why you dont take a salary from your company?

I earn well over the limit on my self employment, which covers the allowance. Also, the pain of PAYE for 4 ltd companies makes me break out in a sweat!

 

[MyAccountantOnline]

....
I earn well over the limit on my self employment, which covers the allowance. Also, the pain of PAYE for 4 ltd companies makes me break out in a sweat!

That's a lot to manage without keeping full accounting records.

My first thought was VAT and Disaggregation but that's way off topic.

 

[Paul Kelly ICHYB]

That's a lot to manage without keeping full accounting records.

Agreed - I do on other businesses!

My first thought was VAT and Disaggregation but that's way off topic.

Totally different businesses.

 

[ElsolveUK]

On the late payment side - since you're building invoicing into WooCommerce, it's worth knowing about the Late Payment of Commercial Debts Act (1998). Once an invoice is overdue, you're legally entitled to claim statutory interest at 8% above the Bank of England base rate, plus a debt recovery charge (40 to 100 pounds depending on the invoice value).

Most clients pay up quickly when you mention this in writing - a useful lever, especially for event exhibitors who want to stay on good terms.

 

[Ziggy2024]

Couple of things that stand out for me. Maybe too late if you've already ditched the software!

1) why aren't you using the full features of Kashflow. Everything you mention in relation to invoicing can be added into the software (payment details, QR codes). WooCommerce also integrates directly with Kashflow
2) a bank feed can be added and rules set up to minimise human intervention
3) purchase invoices can be pulled into the software
4) most importantly - you can't use cash accounting to prepare a set of ltd company accounts so using the bookkeeping software should make the year end easier. (If your accountant is just using the bank and making no other adjustments then your accounts are not compliant.)

 

[paulears]

Looking at next years MTD rules, you may as well start using something HMRC will accept as soon as you can, because virtually anyone in business will exceed the limit next year for 4 times a year reporting!