I'm quite new to freelancing although I've been doing BK for employers for 10 ish years, mainly using Sage.
My client runs her own business buying and selling groceries online. She started trading in March 09 and needs to file her first return online by early Jan, which I why I was brought in.
I have loaded on all her paperwork onto Sage and have given her her reports for submission. However Companies House are asking for year end stock figures...she is going to try and work out how much stock she had, but how do i build that figure in to the accounts?
From previous postings here I see 1001, 1002, 5200 and 5201 are touched, but how can I incorporate it the figures. Her opening stock was of course 0.00, but I've posted all her purchases to 5000, not 5200.
The BS currently balances, surely if there's to be an entry in Stock current assets, it won't balance? Similarly, the P&L will be out too....
I would also suggest that if it is a Limited Company your client ought to be speaking to an accountant. The accounts need to be in a certain format for filing both for Companies House and HMRC.
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Phil Hendy, The Accountancy Mentor
Are you thinking of setting up your own practice or have you set up and need some help?
If so a mentor may be the way forward - feel free to get in touch and see how I can assist you.
Hi Phil, thanks for the replies. She's not Ltd, she's a sole trader.
Her email to me just reads that she needs to enter a closing stock figure.
Re: nominal code in Sage, is that 1001 for BS and 5201 for P&L?
Thanks again Helen.
Ok understand re: the company - it may be worth making clear to the client the difference between Companies House and HMRC. It may be that they want to have a limited company!
Don't know the sage codes off hand but that sounds about right.
__________________
Phil Hendy, The Accountancy Mentor
Are you thinking of setting up your own practice or have you set up and need some help?
If so a mentor may be the way forward - feel free to get in touch and see how I can assist you.
to confirm Phil's advice it will be dr 1001, cr 5201 (being closing stock). She needs to value stock at the lower of cost or net realisable value. At the moment without any entry for stock, her profits will be reported too low, the closing stock on the P & L will is credited to purchases and so her gross profit will increase, therefore the lower the stock figure obviously the lower the profit (and a lower tax bill).
Just to pick up on Robs point about cost and net realisable value. You need to ensure your client understands that concept. You wont believe how many people I have had to explain that to. A lot seemed to think it was the retail value they needed.
Confused newby, please help!
