Two accounting Qs

[handcrafted]

I am rubbish at using my business bank account. Any profit iv made recently i dont put into my account. I just keep as cash and spend when needed. Do i still put this in my accounts?

Also, and i feel stupid for asking, but i need to provide my profit and loss for my business (council need it!) and i have no clue what figures to give them :mummy: I have an accounts soft wear thingy i got free from the Princes Trust. Its really handy, but i just dont know what figures i need to give them. I sent them my bank figures for the start and end of hte month, which showed what i made and lost....but they wernt right!

Any idea. I need to send them asap.

[AnnieAnna]

As I have no banks near me I keep my cash to use to buy food.
Bit daft to put it in the bank just to draw it out again...plus a car ride or an hour's walk.
As long as you write down the money you take in and file it under IN that's fine.

For profit and loss you need your two lists: money IN and money OUT.
The money in is your sales.
The money out should tie in with what is tax alowable.

You take away one from the other.
If the money in was the larger number you have made some profit.
If the money out was the larger number you've made a loss.

(That's a bit simplistic as you have stock but working out what's left and what it's worth does my head in and the super thing about working for myself is I don't count my stock. I just look at it and go "Oooo that's a bit low, must make some more.")

AnnieAnna

[nattynetty]

I don't always put all my takings into my business account either, I make sure I have enough to cover my bills and rent in there and tend to use the rest for shopping etc - like AnnieAnna I don't see the point paying it in only to withdraw it again a few days later.

When you're working out your profit and loss it's probably best not to look at your business bank statements as it won't be an accurate picture. Get all your receipts together for the year and divide them into 2 piles - receipts (or records) of what you've sold (PROFIT) and receipts for whatever you've spent for your business (LOSS). Take the Loss total away from the Profit total and you'll have the figure you actually made that year. That will give you a basic figure but as Annie says you can then include other deductions such as millage.

[kymbi]

I don't bank all my takings either, but it has to be accounted for as income and included in accounts/tax returns.

For the profit and loss account, you need to identify all your income from sales, the value of the stock that was sold and any expenses related to the business. On a simplistic level, the profit and loss is:

Total income
less: cost of the stock that was sold
less: allowable business expenses
= Profit (or loss)

You shouldn't deduct all the purchases of stock that you paid for in the period (year, month etc), but only the value of the stock that was sold, so you should keep a record of what was sold.

To identify how much stock has been sold (if you've not kept a record along the way):

Value of the stock you had at the start of the year/month(opening stock)
add: cost of stock purchased during the period
deduct:cost of stock left at the end of the period (closing stock)
= cost of the stock that has been sold

There are basic records that you need to keep if you are self-employed for HMRC and self-assessment. Business link has some good information for small businesses and this link outlines what records you need and how to set up a simple profit and loss account:

http://www.businesslink.gov.uk/bdotg/action/detail?r.s=sc&r.l4=1081526181&r.l1=1073858808&r.lc=en&r.l3=1082611885&r.l2=1073859209&type=RESOURCES&itemId=1081563500
(http://www.businesslink.gov.uk/bdotg/action/detail?r.s=sc&r.l4=1081526181&r.l1=1073858808&r.lc=en&r.l3=1082611885&r.l2=1073859209&type=RESOURCES&itemId=1081563500)
sorry if this is a bit overwhelming :confused:




(http://www.businesslink.gov.uk/bdotg/action/detail?r.s=sc&r.l4=1081526181&r.l1=1073858808&r.lc=en&r.l3=1082611885&r.l2=1073859209&type=RESOURCES&itemId=1081563500)

[handcrafted]

hmm....i keep a record of what materials i buy and what i get in profit, but only a rough account of exactly what i sell. I dont have a record of what stock i have though....sigh!

[nattynetty]

I dont have a record of what stock i have though....sigh!

Get counting then! :D

I hate doing my stock take every year...it takes 2 days to complete and I start off counting everything merticulously but towards the end of it I get less and less accurate as boredom sets in :mummy:

[Lucy's Designs]

Just to put another spin on it...I bank every penny I take. I'm fortunate in that I'm only 5 minutes away from the bank and it has a car park, but I really think it's worth doing. Even if you go to the bank, pay an amount of money into your business account and while you're there cash a cheque from that account to your personal one, it means that everything you've done - be it money in or money out - has gone through the business account, and then will appear on your monthly statements.

I also have a cash book that I write in myself of money in and out so I know I have a cash flow record that's 100% up to date, really handy when you're sending out a lot of cheques that people don't cash right away

[handcrafted]

I do have my accounts that i keep on my laptop that i write in all my ingoings and outgoings. Its just if i give them it for the year starting April 09, it needs to also include what was in my bank in the first place. So im just going to write out opening bank balance - income and expenditure - then closing bank balance.