Doing Books Please Help!

[HelenP]

Hello

I'm doing my husbands books for the first time and I am totally lost. He has a sole trader plastering business. I have got some software called Personal Accounts' which I have got to grips with but I'm not sure of all the information I need. I have looked through the posts but couldn't find exactly what I was looking for.

At the moment I am going through his bank statements and entering all the transactions that have come in and out and this is giving me a kind of balance sheet.

Do I then have to match each bank statement 'event' i.e. Direct Debit to T Mobile' witha receipt or invoice or both. I.e with the T Mobile Bill and a statement showing the payment receieved. Or 'Cash Machine Withdrawal' with one of those slips (could be struggling here!) or Petrol Station, does this need the receipt too? and also things we have done online, like buying webspace, the money is shown going out of the bank but I don't think we ever got an invoice from them or a receipt.

Also things like if he has bought a skip with cash and has the receipt can I put that as an outgoing even if I don't know which cash withdrawal it tallys to?

He pays himself a 'wage' of £350 a week that goes into our joint account which we use for spends and household outgoings. Is this simply classed as 'wages' and therefore taxable or is it a drawing like a cash withdrawal and do I need to mark the differences (I am at the moment) also if he goes and buys lunch with his business switch card I have put these down as misc personal use but do they need to go in the books for the accountant?

Finally for all the cash going in, i.e. payments from jobs, do we need to show invoices and/or receipts for all of those too.

I'm so sorry I sound so thick I am an intelligent person honest its just I want to do it right and I have never done anything like this before. Maybe I should just go on a course but I did try and ask the accountant but he just said it was very easy and I would have no problems (!)

Would be very, very grateful for some advice.

Helen

[Joyous]

Flippin’ heck Helen! A course sounds like a pretty good idea to me, there are some pretty good ones online if you feel like having a look. Anyway back to your questions.

You should ideally have an invoice/receipt/statement to support all of your transactions. However the absence of a receipt doesn’t mean that the transaction didn’t happen so you should still record it regardless. I suppose it will really matter if the taxman decides to take a closer look and you don’t have the paperwork to support your accounts.

Unless you’re running a petty cash tin post all cash withdrawals as a debit to “drawings”. Any cash payments he than makes can be credited to “drawings”. You don’t need to match a particular cash withdrawal to a particular purchase.

As a sole trader the £350 per week is drawings, not salary or wages. As is the money that he spends on his lunch via the Switch card.

Regarding cash coming in it is imperative that you have receipts/invoices to support this. HMRC is very suspicious of cash based businesses and the assumption if you don’t issue invoices is that you’re pocketing the cash and not declaring it. Guilty until proven innocent I’m afraid.

Regards

Joy

[HelenP]

Thanks for that Joy. I will make sure we have invoices issed for all payments coming in and will convert all the varous outgoing, 'cash withdrawal', 'lunches', 'cash transfers' to 'Drawings'- should be straightforward to do on the software. I think I have got it now. Any good, FREE courses online that you know of???

Thanks for your reply it was very helpful

Helen

[Joyous]

Have a look here and here.

Regards

Joy

[timd1230]

Thanks Joy - Some useful information for the rest of us as well
Tim

[sioux]

Originally Posted by Joyous

Have a look here and here.

Regards

Joy

This is just what i have been looking for, Thanks a million joy