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Bookkeeping....

blackviper90210blackviper90210 Feels At HomeRegistered Posts: 25
Question:

I have been asked by an acquaintance, to "do" his books.

Having only been in my job for 8months for a company and still learning after a career change, can anyone give me an idea of what exactly this involves please?

I've told him I would look into it and get back to him with an answer, as he doesn't know what to do either, as he has not long started his business.

Any help and advice would be gratefully received.


Dave:thumbup:

Comments

  • SashaDellaSashaDella Trusted Regular Registered Posts: 362
    I'm assuming he is a Sole Trader.. Would mean just invoices and receipts. And then mocking up to trial balance?
  • blackviper90210blackviper90210 Feels At Home Registered Posts: 25
    SashaDella wrote: »
    I'm assuming he is a Sole Trader.. Would mean just invoices and receipts. And then mocking up to trial balance?

    Thank you SashaDella,

    Doesn't help I lack confidence in my abilities and nervous of taking on my first "client".

    I'll pop round and see him and see what he says.


    Thank you again :thumbup1:
  • jaybagjaybag Settling In Nicely Registered Posts: 16
    Thank you SashaDella,

    Doesn't help I lack confidence in my abilities and nervous of taking on my first "client".

    I'll pop round and see him and see what he says.


    Thank you again :thumbup1:


    Hi Blackviper90210
    I am afraid I cannot offer any advice,as I am just about to start my AAT and deal with sole traders and small businesses when I am qualified so I would really be interested as to how you get on.Even though I haven't started yet I am still nervous about "doing" books for people....
    Please keep me posted-and good luck!
  • readerreader Experienced Mentor MAAT, AAT Licensed Accountant Posts: 1,042
    Question:

    I have been asked by an acquaintance, to "do" his books.

    Having only been in my job for 8months for a company and still learning after a career change, can anyone give me an idea of what exactly this involves please?

    I've told him I would look into it and get back to him with an answer, as he doesn't know what to do either, as he has not long started his business.

    Any help and advice would be gratefully received.


    Dave:thumbup:

    If I was you I would prepare the basic day books:

    1) Sales day book (from the sales invoices or record of takings)
    2) Purchase day book (from purchase invoices and receipts)
    3) Bank book (from the bank statements- the money coming in should tie into the sales day book & many of the bank payments should tie into the purchase day book. Any bank payments that do not tie into the purchase day book may be additional expenditure, i.e. bank charges).

    Once you have prepared the above day books you'll have a clearer understanding of what is going on.

    Questions worth asking him are:
    1) Is he VAT registered? Does he need to be? Is his turnover for the last 12 months been greater than £79,000?
    2) Does he have any employees? Should he need to run a payroll?
    3) Is he a sole trader or limited company?
    4) Is he registered for personal tax and class 2 NIC's?
    5) In addition to his main bank, does he use any other accounts, e.g. credit card (if so it may be worth getting these statements and preparing a credit card book) and any payments that do not tie into the purchase day book may be additional expenditure.
    6) Does he receive payments in cash and how does he account for it, i.e. if he receives £100 and spends £20 on goods and only banks £80 you will know what he should be showing £100 of sales and £20 of purchases (not £80 of sales).
    7) Ask him about his typical business expenses and personal expenses that have gone through the bank account (this will help you figure out what receipts/invoices/payments are business-related what what can be categorised as drawings).

    I would just you go over your Level 2 notes regarding day books and trial balance. Hopefully it is just a simple case of income - expenditure = profit.

    Level 4 books on business tax and personal tax may also help to give you a feel for what is a business expense and how profit is taxed.
  • flyhighflyhigh Just Joined Registered Posts: 18
    reader wrote: »
    If I was you I would prepare the basic day books:

    1) Sales day book (from the sales invoices or record of takings)
    2) Purchase day book (from purchase invoices and receipts)
    3) Bank book (from the bank statements- the money coming in should tie into the sales day book & many of the bank payments should tie into the purchase day book. Any bank payments that do not tie into the purchase day book may be additional expenditure, i.e. bank charges).

    Once you have prepared the above day books you'll have a clearer understanding of what is going on.

    Questions worth asking him are:
    1) Is he VAT registered? Does he need to be? Is his turnover for the last 12 months been greater than £79,000?
    2) Does he have any employees? Should he need to run a payroll?
    3) Is he a sole trader or limited company?
    4) Is he registered for personal tax and class 2 NIC's?
    5) In addition to his main bank, does he use any other accounts, e.g. credit card (if so it may be worth getting these statements and preparing a credit card book) and any payments that do not tie into the purchase day book may be additional expenditure.
    6) Does he receive payments in cash and how does he account for it, i.e. if he receives £100 and spends £20 on goods and only banks £80 you will know what he should be showing £100 of sales and £20 of purchases (not £80 of sales).
    7) Ask him about his typical business expenses and personal expenses that have gone through the bank account (this will help you figure out what receipts/invoices/payments are business-related what what can be categorised as drawings).

    I would just you go over your Level 2 notes regarding day books and trial balance. Hopefully it is just a simple case of income - expenditure = profit.

    Level 4 books on business tax and personal tax may also help to give you a feel for what is a business expense and how profit is taxed.


    The other point to be discussed is how the new gentleman "doing the books" is to be remunerated. Any suggestions how to keep everyone happy?
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