[Tosh]

I've spent this afternoon gathering up my receipts for stuff I've paid out for, fuel, parking, window cleaning supplies... etc and have stapled them individually onto an A4 peice of paper.

I've then highlighted the date and the amount paid out and put them into date order in preparation for entering the information onto a spreadsheat, in columns, which is probably another three-or-four hour job.

I'm an ex-accountant (not a tax accountant) so I know how to manage financial information; but I wonder how you lot account for your expenditure?

How do you do it?

[Ian Lancaster]

I pay my accountant £200 a year (inc vat).

All income and expenditure is recorded in a multicolumn cash book, all invoices are allocated consecutive numbers and cross referenced then the whole caboodle goes to the accountant and he waves his magic wand

[Tosh]

I pay my accountant £200 a year (inc vat).

All income and expenditure is recorded in a multicolumn cash book, all invoices are allocated consecutive numbers and cross referenced then the whole caboodle goes to the accountant and he waves his magic wand

Ian,

You do all the work; the accountant does the really easy bit which is just entering the figures into your tax return.

The only work involved here is this bit:

All income and expenditure is recorded in a multicolumn cash book, all invoices are allocated consecutive numbers and cross referenced

Instead of the 'multicolumn cash book', I use an excell spreadsheet (same thing, but the spreadsheat adds everything up and it's easy to correct a mistake; tippex is not allowed in financial accounting  ).

As for cross-referencing, it's easy, just put your receipts into date-order and give each one a PV (payment voucher) number starting from 1 (just number them in pen from 1 upwards in the top right-hand corner of each one; remembering you should make them A4 sized by stapling them to an A4 sheet of paper) and ensure this is the same as your column entry.

Ian, you basically do exactly the same as me.

I was just wondering if there was a simpler way!

(There probably is an easier way; do it at the end of each month, rather than leave it till the end of the accounting year!)

[dai]

I put each bank statement in it's own clear plastic sleeve, the receipts are sorted out by date and go in that months sleeve with the statement.
Expenses are also written down in my ledger along with income etc.
I think a lot of us make the accountants job too easy, they charge the same for the guy that goes in with a plastic bag full of receipts and invoices and his income figures.

[ok cleaning]

 I pay to my accounted to do everyting for me so i dont spend any time for this side of the business

[ronnie paton]

i try to keep on top regular, i use reciepts and bank statements has some things dont come with a reciept.

I use a spread sheet and give each expenditure a folio~(think this is what its called) number and put it into the right catergories, i also put folio number on bank statement and then hand it all over to accountant.

i guess the accountant does the easy work but she also knows of things which i can add to save money on my bill./

[scud]

  My mrs does it for me - DAILY - everything is recorded and sorted, it takes 10 minutes when it is time to fill out the returns, which are done the day they hit the mat.
 
  Nothing like getting it done and out of the way.

[cardo]

I've spent this afternoon gathering up my receipts for stuff I've paid out for, fuel, parking, window cleaning supplies... etc and have stapled them individually onto an A4 peice of paper.

I've then highlighted the date and the amount paid out and put them into date order in preparation for entering the information onto a spreadsheat, in columns, which is probably another three-or-four hour job.

I'm an ex-accountant (not a tax accountant) so I know how to manage financial information; but I wonder how you lot account for your expenditure?

How do you do it?

This is how i do it . I spend about 2 days each year sorting it all out. I don't  really mind as its a welcome change sitting down and concentrating the mind for a while... plus you know exactly where you are with this stuff.

[cherubs cleaning]

put it al in a tescos c/bag



and let them sort it



jerry

[Tosh]

put it al in a tescos c/bag

and let them sort it

jerry

Tescos are pretty good, I even use them to look after my dog's health insurance, but I didn't know they provided this service!

Would I get a 'green point' if I used one of my own re-useable bags?

[L.J.Thorpe]

everything relating to business is paid for out of seperate bank account
receipts for anything needed while out on the round (fuel usually but sometimes running repair stuff)get filed in the glove box and collated every few months
takes a couple of evenings to sort it all out at end of year

[Tosh]

everything relating to business is paid for out of seperate bank account

Sometimes you have to use cash, for example loose change for parking?  You may need a spray for an inside Georgian job; do you really want to use a card for a purchase under £2?  If I want to go to Bristol, I have to pay a toll on my return jouney; cash only!  I bought a £15 padlock from my local market for the chain I secure my ladders with; they wont take a card.

There's also no requirement to pay for stuff from a seperate account, though I know some business accounts give you a credit card for this sort of stuff.

You will still need receipts, no matter how you pay for stuff for your business.  So the account you pay for your stuff from is irrelivant.

[L.J.Thorpe]

maybe irrelevant but MUCH easier if its seperate
as for the cash issue i use cash from the days "purse" for emergency or on the hoof purchases and then adjust amount banked that week accordingly
and yes i DO keep receipts for everything
a 2.99 invoice book bought for cash last week and a 1.35 jubilee clip today(used on transfer hose and bought from a garden centre today)

[Moderator David@stives]

I use George for everything,  I enter every expence into George as it occurrs at the end of the year I print out  an expence sheet, which i double check aginst my receipts.

As an Invoice or receipt comes in I put it to the left hand side of my laptop, once i have paid it i write paid on the invoice, when I enter it ito George I write  entered on the Invoice then put it in a box folder for that tax year.

At the end of the year< i Give my accountant the box and the print outs from George and he does everything else.

[Tosh]

Bump, for Squeaky's benefit!

 

[macmac]

sort it all out in one day at the end of each year, print a very basic statement up in word & give it to accountant.

Tony

[Tosh]

sort it all out in one day at the end of each year, print a very basic statement up in word & give it to accountant.

Tony

Why give it to an accountant?

For your average sole trader, the majority of the work is 99% done by the person himself; the accountant just takes your figures and inputs them onto the tax form!  It must take him about 10 minutes; no more!

Filling in the form is the easy bit, it's your annual accounting of your expenses and profit that's the work involved.

[ronnie paton]

a good chartered accountant will save you money they will know of things that can be included to bring your tax bill down that's why alot of spend 200-300 on account

[Tosh]

Ronnie,

I reckon with a little bit of reasearch, you can do all that stuff yourself.

The principle is, anything you spend on your business is an expense, though I do admit there's grey areas when stuff is dual purpose; for example I could by a ditgital camera and put that through my books as an expense, since I may want to use it to take photos of accounts, post them on this forum and ask how much to charge.

But it's still a bit dodgy and to be honest for your average sole trading window cleaner, you're expenses are simple; unless you want to put lots of 'grey area' items through your books.

Basically I claim for all the boring usual stuff and even though I have an office that fits the criteria I've read on this forum (ie no bed; it is used as an office), I don't claim a portion of my mortgage/heating back. 

My biggest expense is always fuel!

And it's 'hissing' down here! 

[ronnie paton]

iv just gone ltd so i think ill defo need one and i do hope in time to do some courses to get a better in sight but i fee l at the mo its money well spent.

maybe one day when i do have  ago ill be with you but at the moment i feel they do things fro me i couldnt do my self.

[Tosh]

Ronnie,

It's worth finding out how it works to help you run your business.

I mean I've read loads of times lads buying stuff they didn't really need and saying, 'Ah well it's tax deductable anyway'.

As if it means they've paid a supplier the money they would've normally have paid to the tax man.

But it doesn't work out like that.

If you spent £100 on your business, that money is deducted from your profit which means you've actually lost the £100.

However if you classed that money as profit, you'll get taxed on it (say 22%), so in this instance you've lost £22.

So buying something for £100 means you've lost £100, but declaring £100 as tax means you've just lost the £22.

Do you see my point?

[steve a]

iv just gone ltd so i think ill defo need one and i do hope in time to do some courses to get a better in sight but i fee l at the mo its money well spent.

maybe one day when i do have  ago ill be with you but at the moment i feel they do things fro me i couldnt do my self.

Thinking of doing this myself, will be keeping a close eye on how things go for you, if you don't mind a few questions now and then.
Q1/ do you employ? I have just taken an employee on after going it alone for the last 18 months, before that I always employed but sometimes they do your head in! Lol.

Q2/ Would it still be worthwhile going Ltd as I have now cut my profits and my tax by employing, but I will get a day or two off now.
(I hear you say cut your profits, what's the point of employing if it aint gonna make you money.Well I was having to work 6 days a week sometimes 7 and still couldn't cover all my work, so it was either shed some work or take a lad on and at my age i will be happy to take weekends and an extra day a week off, and get all my work done, even if it is less money.)

ie: £700 for 7 days working, knackered all the time, no social life and lots of tax
     £500 for 4 days working, not knackered, get to go fishing, less tax but less money.

Figures just plucked out from space only a for instance

[Niall McAllister]

I let George deal with it. I Check the receipts against the numbers it gives me, then all i need to do is take the capital allowance items and remember not to include them as normal expenditure.

also was at a self assesment course, and the guy there said that the room does not have to be used soley for business purposes to claim for its use. you work out what percentage of the house cost that room is using then work out what percentage of that use is for work and add that figure. myself, i don't claim for the room as it would be pennies.

[ronnie paton]

i do employ but ionly went ltd on 1 december so i dont have all the answers, i would say there is nothing wrong with employing and making a little less if your doing less work.
you need to employ to move forward, and if things go well you could be erning money for being in the office you cant do that by standing still.

tosh i understand the basics like you have explained but its all the employees wages and the extra bits like a percentage of your bills ect ect

[Tosh]

Pay accountant fee Tosh, and hopefully little or no tax.

Total and utter RUBBISH!

If you pay little or no tax, you've made little or no money; or you're lying.

FACT!

[Bobs Window Cleaning]

Blimey.....wish i had your accountant Ewan.

Bob

[Tosh]

I'm not anti accountant; I think if you employ or are VAT registered; you should use an accountancy service; because I think things may start getting complex, but for the average sole trader turning over less than than the higher tax band, then it's so easy to fill in your own self-assessment form; why pay someone else £200 to do it for you?

Just read the notes; fill the form out in pencil; then once you're sure it's right; use a black pen.

Blimey, I'm an ex accountant, though not a tax accountant; just supply me with your figures in the format I want them in, send me your paper tax return and I'll fill the form in for you and charge you £50! 

To me, that's not bad little side-line for ten minutes work while I'm sat on my bottom drinking a coffee.

I say again; YOU do all the work with providing the figures the accountant wants; he/she does the easy bit and enters them in the right boxes on the form.

[Chris B]

Ronnie,

It's worth finding out how it works to help you run your business.

I mean I've read loads of times lads buying stuff they didn't really need and saying, 'Ah well it's tax deductable anyway'.

As if it means they've paid a supplier the money they would've normally have paid to the tax man.

But it doesn't work out like that.

If you spent £100 on your business, that money is deducted from your profit which means you've actually lost the £100.

However if you classed that money as profit, you'll get taxed on it (say 22%), so in this instance you've lost £22.

So buying something for £100 means you've lost £100, but declaring £100 as tax means you've just lost the £22.

Do you see my point?

Good point Tosh, but those that say that may not be doing or thinking correctly.

Purchases for you business should are not just to enable you to make more money, they have a secondary purpose which is more or just as important and that is to add a financial value to your business should you sell it in the future.

Better than giving the tax man £22!

Good point Ewan, your business will only be worth what profits you declare in the long run, get a good honest accountant

Tosh, mine like most peoples accountants will have a secondary function, and that is "advice" throughout the year and for that bit of extra dosh its been well worth it for me....

[macmac]

sort it all out in one day at the end of each year, print a very basic statement up in word & give it to accountant.

Tony

Why give it to an accountant?

For your average sole trader, the majority of the work is 99% done by the person himself; the accountant just takes your figures and inputs them onto the tax form!  It must take him about 10 minutes; no more!

Filling in the form is the easy bit, it's your annual accounting of your expenses and profit that's the work involved.

Because when i look at a tax return form it doesn't make any sense! although i agree with your point, i just wouldn't know what to do.

Tony

[Tosh]

Tosh, mine like most peoples accountants will have a secondary function, and that is "advice" throughout the year and for that bit of extra dosh its been well worth it for me....

Remember, accountants are good at the 'bullpoo' factor; they'll make processes sound more complicated than they actually are; just to bamboozle you and keep your custom.

They're as hard-nosed as any of the successful window cleaners here!

But I agree, if your business is big and complicated; get an accountant; no doubt about it.  But if you're Mr Average like me, don't waste your money.