Accounting

Choosing Bookkeeping/Accounts Software
* Choosing bookkeeping or accounting software for your business or organisation is a big step. There is so much available on the market, with new vendors and products coming out all the time. So, how do you decide which is the best for you? How much you are prepared to pay? There is such range of [read more]
The Consequences of Being Inside IR35
*The financial consequences of being inside IR35 are mainly (there are other consequences) you lose the tax-avoidance facility of dividends. Essentially, if you are within IR35, you must calculate a “deemed payment” and pay NICs and PAYE (tax) on that deemed payment. The tax-deductible amounts that you can claim in travel and expenses will also [read more]
When to Register as an Employer
*As soon as you take anyone on where any of the following conditions apply, you need to register with HMRC as an employee. the employee already has another job the employee receives a pension (state or occupational) the employee will earn at or over the PAYE (tax) threshold the employee will earn at or over [read more]
SAGE VAT codes
*Sage uses the following codes for VAT: T0 – zero rate VAT T1 – standard rate VAT T2 – exempt (eg. stamps, insurance, aire fares, bank charges, financial services T4 – EC Sales T5 – lower rate VAT (eg. electricity, gas, women’s sanitary products) T9 – not involving VAT/outside scope of VAT (eg. suppliers that [read more]
Registering for VAT and Keeping VAT records
*You must register for VAT with HMRC. This can be done using a paper form or online. Once registered, you generally have to keep reocrds of: the VAT you charge on your sales (output VAT) the VAT you have paid on your purchases (input VAT) the total amount of sales excluding VAT the total amount [read more]
Using Excel for Accounts and Bookkeeping
*The great thing about MS Excel (and others say it’s greatest downfall) is that it is so adaptable and because it normally comes bundled with the PC you bought for your business, it’s cheaper than buying accounting software. For start ups and possibly for the sole trader or small limited company, it’s a very easy way of keeping track [read more]
Why have an Accountant?
*Because… Doing the accounts takes you away from your real business An accountant could do the job quicker and more accurately An accountant could save you money in the form of tax-savings as well as sometimes finding other areas for savings and efficiencies. Professionally produced year end accounts will be taken more seriously by banks and [read more]
What is the Difference between Bookkeeping and Accounting?
*The two really overlap: Bookkeeping is part of accounting. It is the recording of the day to day transactions of a business – either in “manual” books, or on computer software or spreadsheets. Therefore, bookkeeping can play an important role in the efficient running of a business: Purchase Ledger – A business needs to pay [read more]
Simple Bookkeeping
*You need three basic “books” (or ledgers): – a cashbook to record all cash/cheques/bank transfers going in and out of your business – a purchase ledger, to record details of all the purchases that you make – a sales ledger to record details of all the sales that you make (if you are a retail outlet, [read more]
Advantages of a limited company
*Obviously, the main attraction of forming a limited company is the “limited liability” of its owners, the shareholders, as it protects the personal assets of the owners. Should the company fail, the company is liable without limit for its own debts, but its shareholders’ liability is limited to the amount oustanding (if any) on their [read more]
What do you need to set up a company
*Essentially, before you begin, you need: a company name, which can be almost any name that has not previously been registered. a Director a Company Secretary (which cannot be the sole director) (or you could have two directors, one of whom could also act as Company Secretary) a shareholder (which can be either the director [read more]
Choosing Your Accountant
* Speak to your prospective accountant on the phone first and then, if you are still happy, set up an initial meeting – which should be free of charge. Ensure that they are professionally qualified and are current members of a professional body (Chartered Accountant (ICAEW/ICAS/ICAI), Chartered Management Accountant (CIMA), Chartered Certified Accountant (ACCA) for [read more]

DIY Accounts 25/10/2011 DIY Accounts Posted by Happy Accountant at 9:00 am No Responses Accountant, Accounting, In Business, Saving Money, Saving Time, Tax *I’ve blogged previously about why you should have an accountant. However, when trying to cut costs (and who isn’t, these days?), often business owners look to cutting accountant fees. They either fnd a cheaper accountant, or they do without one altogether. Unless you require an audit, there is absolutely no obligation for a business to appoint an [read more] Full Article	Recourse Factoring in the Statutory Accounts 26/08/2011 Recourse Factoring in the Statutory Accounts Posted by Happy Accountant at 9:00 am No Responses Accounting, Limited Company, Sales Ledger *Recourse Factoring calls for “Separate Presentation” in the balance sheet of a company’s statutory accounts. The liability to the Factor is shown as a short-term creditor, because in effect it is a loan from the Factor. The Sales ledger debtors are shown under “current assets” in the usual way. The Factoring fees and discount fees [read more] Full Article
Advantages and Disadvantages of Factoring 25/08/2011 Advantages and Disadvantages of Factoring Posted by Happy Accountant at 9:00 am No Responses Accounting, Credit Control, Sales Ledger *Advantages of Factoring It is a quick boost to cash flow (assuming that the Factor’s conditions can be met) Some customers take Factors more seriously and pay quicker (also, the reverse is true) Non-recourse Factoring can protect against bad debts. Factors will credit check your customers which will help reduce bad-debts. Some Factors will withhold [read more] Full Article	The Factoring Process 23/08/2011 The Factoring Process Posted by Happy Accountant at 9:00 am No Responses Accounting, Credit Control, Sales Ledger * Every time a sales invoice is raised, a copy must be sent to the Factor as well as to the customer. (Some Factors will also raise the sales invoices, which would cut out this step). The sales invoice is marked as being factored, and the customer is required to pay the Factor direct. The business can [read more] Full Article
How Debt Factoring Works 22/08/2011 How Debt Factoring Works Posted by Happy Accountant at 9:00 am 1 Response Accounting *Factoring or Debt Factoring typically used by business to help cash flow. Factoring involves a business selling it’s sales invoices to a Factoring company, at a discount. The business is then able to “draw down” cash against the sales invoices and the Factor (as Factoring companies are known) collects the money from the business’s customers, [read more] Full Article	Use of Home – Pitfalls 29/07/2010 Use of Home – Pitfalls Posted by Happy Accountant at 9:00 am No Responses Accounting, Corporation Tax, Personal Tax, Tax Some pitfalls in calculating “use of home” costs: not ensuring that the calculation results in a reasonable figure. not using a reasonable basis of apportionment not being able to substantiate claims greater than £3/week with bills/receipts. not having a licence agreement in place (directors/limited companies) Full Article
Directors – Use of Home 28/07/2010 Directors – Use of Home Posted by Happy Accountant at 9:00 am No Responses Accounting, Corporation Tax, Limited Company, Saving Money, Tax *The situation of use of home is slightly different for directors than for sole traders. In this instance, it may be more straightforward and advantageous for the company to pay rent to the director for the use of their home. (Make sure that there is a licence agreement in place to cover the rental agreement.) The [read more] Full Article