Please help me....paper work

[Sharon]

Its that time of year again, the deadline is approaching for the tax returns and here i am again, leaving it till the last minute, which i know is my problem and i really need to stop procrastinating and leaving it soooo late. That is one of my new year resolutions. I will get my accounts ready as soon as i can.
Where i really need help is that i need a system. I have no system and end up in a bit of a mess. Not really knowing if i have the right info. I need a system that is efficient and has all the info needed if ever i was investigated for any reason which is something i worry about.
I would appreciate greatly any help to resolve my paperwork woes.......they are a real thorn in my side...
sharon

[thecurtainmaker]

Re: Please help me....paper work

Hi Sharon,
it's always a bugbear! I use a computerised system, which prints out the figures for the return for me at the end of the year, but you may not want to go to that extreme. It's also better to do it sooner! But I haven't filed my yet either, but I was waiting for the accountant to explain about capital investment figures.

It helps if you work at it during the year, rather than leaving every thing till the end. Make sure you keep your sales and expenses receipts, even just in two separate shoe boxes. Then at the end of the year you can add up the sales, then sort the receipts into the different categories that the taxman likes, and add them up. Print out the form from the internet, so that you can write the figures in, then enter them on screen.


You could also, in future, book a session with a local accountant/bookkeeper, so that can take you through the steps and explain what's needed.

Hope this helps. Good luck!

[Louise]

Re: Please help me....paper work

I agree with Pen that "little and often" in the way to go. I have a spreadsheet set up with a page per month. My work is on the left hand side (i.e. income) and expenses on the other. If you have a larger business, then this might work better to have two separate spreadsheets - one for income and the other for expenses.

At the end of each month I make sure the page is up to date, receipts and invoices organised etc. then at the end of the tax year it is fairly simple to find the figures to complete the tax forms.

Once you have typed the info in, it is also quite easy to then manipulate it to give different summaries, compare months or years to see how you are progressing.

[suel]

Re: Please help me....paper work

Hi Sharon,

Even though I use an accountant to submit my Tax and work out my final accounts, I present my papers to him about August.

Start off with a wallet, one for every month of the year, and at the very least stuff the receipts into the correct wallet as you go. If they are small receipts, write what you purchased on them as you will end up chucking them out if you forget what you have bought.

Month by month, I do a spreadsheet, for my expenses and my income, so I have a good idea of my profit, and how I am doing compared to previous years, and most importantly what my tax bill might be.

I only use a hand written Invoice book for my invoices, as I don't do that many, although they tend to be high value.

My accountant charges about £150 to do what he needs to do, and I have peace of mind, that everything has been done correctly. Everyone tells me it is simple and I could do it all myself, but I would rather be making curtains and earning money, than spending time on paperwork.

Don't forget all those hidden costs, i.e. car running costs, working from home costs, insurance, heating bills, telephone etc. (if you work from home). He works out all these allowances for me. Keep receipts for absolutely everything. Even my new sat nav will have a percentage put towards business use. If they are not allowable your accountant will tell you.

I did at least know what my Tax Bill was back in October so have a had some time to get the cash together. I have never left it this late, as I would not be able to sleep, but it is never as bad as you imagine, once you get started.

Good Luck.
Sue.

[YvonneR]

Re: Please help me....paper work

I do my accounts in the same way as Sue and Louise. I also use an accountant to finalise my year end accounts and submit my tax bill - however I pay around £400 for this to be done. (You seem to get a really good deal Sue!).

I usually give the accountant all of my books in June and by the end of August I have the figure for the tax bill which is perfect for me as like Sue (and everyone else I imagine) it gives time to get the money together without having sleepless nights worrying about it.

[jane]

Re: Please help me....paper work

I use a separate Excel spreadsheet for each tax year. Each spreadsheet has three pages - one for income for the year & one for expenses for the year & one page is a summary. I only have a small business so I just keep the two sheets updated as I go. I couldn't face sorting it all out at the end of the year and it means I know what I've got going in & out at a glance.

The summary gets automatically updated so at the end of the year, I have all the figures I need for my tax return which is submitted online for me by a friend who's an accountant. Because I give her all the info she needs she really doesn't have to do any work & charges next to nothing as it takes her only a few minutes to input the info (I could probably do it myself but am frightened of getting it wrong!)

[enid]

Re: Please help me....paper work

Have to agree with others here, little and often.....rather think that this topic came up about the same time last year as well.
I did sit down this week, no work on as yet, and looked at 2008/2009 thinking that I had started it earlier this year. I had .....April only!! So you can guess what I have been bringing up to date this week....all done up to December
I don't have a big t/o to worry about, with the baking I have always had a tax return, but it really is worthwhile to keep all the bits, even as has been said in a shoe box,( plastic wallets ) are a good idea as well and set aside one day per month just to keep up to date.

Goody two shoes here got hers done in September and has just had a little rebate, so Sorry Sharon, I am polishing my halo just now.

Enid

[Sharon]

Re: Please help me....paper work

Thanks so much to everyone for your input, this forum is the best.
I really have to change my ways as mentioned i have so many sleepless nights about this, and there really is no need. I just need to be more organised.
I have a few questions and will probably think of more as i go along but here goes.

1 no one has mentioned doing a stock take at the end of the tax year, do you do that and if so how, or do you keep track of stock as you use it?

2. If you order in for example roman blind tracks for an order, do you make a note either on the invoice or somewhere else what customer those tracks have been used for?

3. do you work out how much actual profit you have made on each job, ie exactly how much buckram, curtain weights, velcro, thread ect you have used?

thanks again
sharon

[jane]

Re: Please help me....paper work

Hi Sharon

As a very small business, I have a pretty good idea of what I've got in stock so don't do an actual stock take & haven't found it necessary for tax purposes. On my expenses records, I make a note if I've ordered specific items for jobs but otherwise it's just general stock - again this hasn't been necessary for tax purposes. I do work out my actual material costs for each job but I don't take into account light, power, etc so it's not 100% right but it does give me an idea of how much profit I make & how much I make per hour (which I try not to dwell on as it's usually depressing!)
Hope that helps

[thecurtainmaker]

Re: Please help me....paper work

You dont need to do a stocktake for tax purposes, as this is a balance sheet item and a balance sheet is not needed for a tax return.

If you want to work out the gross profit for a job, it is the amount billed less materials used. This gives the gross profit, off of this comes overheads - electric, heating, taxes, travelling, tools, etc. I would also have small items like thread and penny weights as overheads rather than per individual job, but you could if you wanted.

[suel]

Re: Please help me....paper work

I am not an accountant, and I do not bother with a stocktake. However I am asked to give an estimate of my stock at the end of the year. Stock in hand, which is paid for but not used cannot be used as a material expense, and I do believe it gets added BACK ON to your expenses. (Don't quote me on that! but I think thats how it works!). Thats why I use an accountant for my Tax Return. Even a little person like me has part rolls of different linings, interlinings and end rolls of fabric. Its suprising how it adds up.

Sue.

[Sharon]

Re: Please help me....paper work

Thanks again for your help, it is all being clear now

[on track]

Re: Please help me....paper work

I use to prepare accounts for small businesses in a past life - The Balance Sheet plays a role in those figures that are in the P&L. Stock should be taken into account, but if the levels of stock remain constant then it will have little/no effect on the P&L figure.

It is the 'matching' principle that cost should be matched to the income they generate.
Eg
no stock at start of year
say near the end of the account period you purchased 10k of fabric but had yet to do the work thus had not invoiced the sale (to make it simple forget deposits)
the 10k would be listed in the balance sheet as stock
in the cost of sales (COS) in the P&L, simply put, this is opening stock, plus purchases, minus closing stock
ie as there is no opening stock all the puchases during the year can be attributed to sales during the year, EXCEPT the 10k purchased near the year end, which will then show up as a COS in the following year along with the income it generates

When preparing accounts, figures like stock you do not need to be precise down to the penny - that is why one poster was asked for estimate of their stock rather than having to do a stock count.

[Rosie]

Re: Please help me....paper work

Gracious me On Track. I think you could start a 'booking keeping for dim curtain makers' posting. I'd read it avidly, being a dim curtain maker.

I will read and re-read your post to try to get it into my small brain....

p.s. I'm not being sarcastic . . . . I really would like to be able to understand!

[suel]

Re: Please help me....paper work

Likewise - it is as clear as mud

Sue (aka another Dim Curtain-Maker!)

P.S. Thank goodness for accountants.

P.P.S. I do get a good deal on my accountant. I have been using him for several years now. He is one of the Dads from school. He works from home from his converted garage, so his rates are very competitive, because I know him and his overheads are low. He charges about half what I used to pay.

Sue