Becoming a bookkeeper

BenA

I was wondering someone could offer me some advice and be a mentor as I am a bit low on confidence at the moment until I am up a running.

I have nearly passed Level 4 (just need to past Business Tax). Currently, I am employed on a full-time basis in an accounts dept. of a manufacturing company and wish to remain that way, but to generate a bit of extra income, I am looking to do bookkeeping for a few close family members and friends, some are limited companies and some sole traders.

I am setting up a process of what I need to do in order to close off each period (calendar month) and complete year end and would like input from accountants and bookkeepers on the following:

-What do I need to do that is ESSENTIAL before closing off periods and completing year-end?
-Who do I need to be registered with before offering services (I know as I am not qualified I cannot mention AAT)?
-Is it advisable to have insurance?
-Should I pass books to an ACCA/CIMA accountant to sign-off?

While I am on the subject. I am just starting to look after by wife's books as she is just starting out as a sole trader. She has paid for a logo to be created for her which cost around $5. Is it worth capitalising this as an intangible asset based on the cost? If so, what is the best way to value the logo so I can measure impairment?

I am also using Sage which she is claiming on her expenses. What is the best time frame to depreciate this as I am unsure of its useful life period yet as I do not intend to use a different accounting packing for a few years?

Thank you in advance for any responses.

Neillaw

Why are you passing the books onto a CIMA/ACCA accountant?
What's wrong with an AAT MIP, this is the type of work you will be attempting to attracted when you become a MIP.
Do you have copyright on the logo?
I would depreciate your sage over the length of you licence, usually a licence is only for one year.

BenA

Thank you for your response Neil.

Regarding passing the books on, I was unsure once I have posted the sales, purchases and other transactions if I would need to pass them on to be 'signed off'. If I do, who do I pass them on to and what do they actually do with them?

My wife has full copy write to the logo.

She has purchased Sage instant accounts which is not subscription based so technically the useful life is until we deem it no longer good enough.

TreadStone

Why would you want to capitalise a $5 logo and depreciate a £120 item of software ??

BenA

TreadStone said:

Why would you want to capitalise a $5 logo and depreciate a £120 item of software ??

This is why I have asked the question "Is it worth capitalising this as an intangible asset based on the cost?"

I am depreciating Sage because, as things stand, the value of it is over 1% of the turnover.

Is what I am looking to do right or wrong? If wrong, could I have some feedback on best practice please?

Could I also have some answer regarding my four main que

Neillaw

Logo - I wouldn't capatilise this as the value is only £3.50.
Sage - Claim this as an expense in the year. As your wife is only a sole trader it may have been better looking at a cashbook type of software like VT Cashbook. You may want to consider this for other Sole traders as well as cloud software.
I was always told that insurance is a must - AAT have hooked up with Trafalgar to provide us with some discount.
If your doing the services for remuneration then you need to be registered for Money Laundering, I use the AAT scheme but as your not a member yet it may be worth looking at other options eg Inland Revenue.
If you pass the accounts onto a CIMA/ACCA then all you are doing is devaluing the MIP system and those people who are already an MIP, if you require accounts to be signed off then look at the MIP register for your area.
Always make sure your monthly file is as near as possible to your year end file, this may mean some extra work but when it comes to year end you are so use to doing the extra work it becomes second nature.
Month End = Bank/Sales/Purchases/Accruals-prepayments/Fixed Assets/Payroll
then you should review both your P&L and balance sheet

BenA

Thank you for your feedback Neil.

Under what circumstances would I need MIP to 'sign off' accounts. I have heard the phrase but never been told what this actually means.

I was looking to use cloud based accounting software for other sole traders so it's good to know it would be the right thing to do. I do the month end sales procedures at work just not the purchasing which I know there is more to do for purchasing.

On the subject of capitalising assets. My wife has purchased a nail technicians table for around £100, similar cost to Sage, which I was also looking to capitalise and depreciate over 3 years. Would this be the right thing to do based on the item and its use?

Ben

TreadStone

BenA said:

On the subject of capitalising assets. My wife has purchased a nail technicians table for around £100, similar cost to Sage, which I was also looking to capitalise and depreciate over 3 years. Would this be the right thing to do based on the item and its use?

Ben

Write them both off to p&l in the year of purchase.