help needed for keeping records

[flatyre]

Hey folks I contacted a few accountants at the end of March regarding setting up as a sole trader. Found an accountant that was pretty decent, not too lax and not too strict regarding what can go down as business related overheads. In early April I got an email from him to say I was registered with HMRC (personal tax number or something). Anyway that's the last I heard from him and I don't know a thing about what records to keep, what i'll be taxed on, what I won't be taxed on etc. I keep a diary with a record of what I earn and what I've had to pay out for, materials, tools, fuel etc. I want to create something on the laptop to have a digital copy which I can update every week. How does everyone else keep their records and if digital, what software do you use?

[onetruth]

I assume you're not going to be VAT registered or have any NI paying employees?

 

I suggest you don't get any specialist software, just use a spreadsheet. Excel is good if you have it, or do it online with googledocs (free if you have a gmail account). You don't need anything fancy, any spreadsheet will work.

 

If you're keeping a diary of everything coming in and keeping receipts for everything going out then that's all needed for record keeping - your account should easily be able to work it out from that. Basically you'll be taxed on your profits as if it was your salary.

 

I want to create something on the laptop to have a digital copy which I can update every week.

 

Really good idea. I try and update after every job, but in reality I waste hours each year searching for records after periods of sloppy bookkeeping.

[Burgess]

Get Quick Books Self Employed its about £60 a year and links to your bank account. Does all the calculations for you. You just have to tag transcations as what they are (i.e. category) but they have guides for you do its all very simple.

[Haironyourchest]

Make yourself a spike for receipts and put them on in chronological order. Also have a "scroll", for the year, with the item and cost, and make several columns with headers like "Van Deisel" "Saw Petrol and Oil" Phone Credit, Van Repairs, PPE, Sundries etc etc. This will make it easier and quicker for your accountant to do his work. If he's charging by the hour and you trust him, it could bring down his bill a lot. If he's a flat rate guy then don't bother.

[Haironyourchest]

Dont foget your depreciating assets as well - generally the cost of the item spread out over a number of years. Any equipment that you use, but which is not a consumable, basically, including equipment that you already had before you started your business, if you use it for work. Saws, Trailer, Machinery, Rope, that kind of stuff.

[spudulike]

You may find it better to get a bookkeeper. My wife does mine and it is just a case of recording your earnings (turnover), taking out your business expenses (Phone, tools, fuel, kit to do your job) and you are left with profit (hopefully).

 

Best to do this on a monthly basis so you can keep an eye on what you are actually earning. You will need to reconcile your invoices with payments in to your bank account and be accurate on this. If paid in cash then pay the cash in in the sums you have received it otherwise it will be a mare.

 

You need to run your year from a specific month, April to April makes sense. The HMRC thing - you will need to do online self certification, basically entering in what you have turned over, what you have spent out, any other earnings such as shares, renting out rooms/land etc and then it will calculate the tax you owe.

 

Good luck

[easy-lift guy]

Hey folks I contacted a few accountants at the end of March regarding setting up as a sole trader. Found an accountant that was pretty decent, not too lax and not too strict regarding what can go down as business related overheads. In early April I got an email from him to say I was registered with HMRC (personal tax number or something). Anyway that's the last I heard from him and I don't know a thing about what records to keep, what i'll be taxed on, what I won't be taxed on etc. I keep a diary with a record of what I earn and what I've had to pay out for, materials, tools, fuel etc. I want to create something on the laptop to have a digital copy which I can update every week. How does everyone else keep their records and if digital, what software do you use?

 

Presumably since your accountant has legally registered your company or self with your countries taxing authority maybe you could just send him an email or phone call and ask him for suggestions or opinions about other suggestions already made by members on AT?

easy-lift guy

[rapalaman]

Just a simple Excel spreadsheet will get you going to start with (30 odd years in and it's still all I use for 2 businesses) - just update it as regularly as you can. I plan on doing it every time I turn on the pc but that always falls by the wayside!

Keep your receipts in order - not covered in mud on the floor of the truck as this makes for hard work.

If your accountant is any good, he will advise you on what you can and can't claim for etc, and any additional records he may want

[Daythe trees]

I use two simple excel spreadsheets, money in and money out. Keep all business related receipts in my wallet and every time I have to load up the PC to create invoices or other business paperwork my first Job is to update money in and out spreadsheets and make a list of calls from the pending jobs list and those who are overdue paying. Takes ten minutes and that bit of discipline before sorting tomorrow's invoice keeps me straight. Then all receipts go in a box file with newest on top, simples!

[R Mac]

Very basic Excel for me, one for Sales one for purchases, I also keep a record on paper. I use an invoice book for sales and all purchase receipts are kept in a folder by month. My 1st year so expect my accountant to tell me I've done it all wrong.

 

Also my accountant sorted out my Sole Trader status thing with HMRC and I haven't heard from him either, not that I expected to tbh, I think the idea is that if I have any questions I call (and no doubt pay) him.

 

He told me to record the following for sales,

 

Invoice Date

Invoice Number

Customer Name

Amount

Cash/Cheque/BACS

 

For purchases,

 

Invoice Date or Tax Date if Tax Date shown on receipt/invoice (not the date you placed/paid the order)

Supplier

Amount

Cash/Cheque/BACS/Debit Card/Credit Card.

 

Hope this is useful.

Edited September 28, 2016 by R Mac