What does 'Accounts' actually mean? Help please

[squish]

Hi Everyone,

I'd really appreciate some help

I have a brick shop & a website that I run & own, I'm a sole trader and submit my own tax returns. (not submitted 11-12 as yet as that's what I'm currently working on)

My husband & I are about to apply for mortgages (a residential & a commercial through a broker at ASC). I know we both need to submit accounts (He is also self employed) but I'm having trouble getting my head around what 'accounts' means.

There are lots of spreadsheets I can put together such as incomings, outgoings, bank statements etc but I'm stressing over what it is I actually need to submit.

Any help appreciated

 

[Young Recruit]

Hi,

If you look at it from the perspective of the lender, they are trying to gauge the risk of lending you money and your ability to pay them. The accounts are simply the documents that provide information about your total combined income and assets. They may also want to investigate your businesses financial statements i.e. profit and loss, balance sheet and cash flow forecast.

Hope this helps.

 

[SuffolkDesigns]

Normally they just want Profit/loss, Balance sheet & Cash flow forecast. They will ask for any additional information such as bank statements if required.

 

[squish]

Thanks for the replies so far. It's been really helpful.

To tell the truth, I've now been trading for approaching 3 years and it's only now that I realise that I need to start putting together the relevant documents etc, not least for the mortgage issue as described in the OP.

On a side note, I've just started to put my profit and loss together and I'm unsure as to what to do about credit and credit payments.

For instance, if I pay company A £500 on a credit card, but then don't pay off the credit card until a month later, which goes on my P&L as a payment?

Additionally, what if I pay £300 off a credit card that has a -£1000 balance, therefore it doesn't marry up directly with a specific purchase, how does that work?

Thanks again in advance for any help you can offer! I think it's going to be a case of employing a bookkeeper or accountant in the coming tax year, but it would be a bit expensive to do it backwards now...

 

[Scalloway]

You should set up the credit card as a bank account, so that the expenditure is recorded as it happens. Then when you make a tranfer from your business account it will not matter if it does not match exactly to items of expenditure.

 

[Philip Hoyle]

Your P&L account could come mostly straight from your SA return - most of the figures should match. The main difference is capital expenditure. You should have calculated your SA figures after adjusting for outstanding invoices & other timing differences as well as stock level movements.