Just joined today and have my first query! I am trying to do my husband's business accounts -Active Cricket Coaching Ltd and have just realised that a week before the end of our financial year, about £3000 of bookings have been credited to bank account that I have not entered on Sage. Our profit before this was £250 and now will be £3250 - do I have to put these through this years accounts to reconcile to the bank account or can I enter them in 2011-2012? I just want to legitimately keep Corporation Tax down for our first year of trading!
From what you have said, it sounds like these payments may be deferred income. Prepayments for services to be supplied in the next financial year.
They are effectivley a debt of the business, and not profit, as you have been paid for work not yet supplied, and should appear on the balance sheet under debtors.
Thank you so much, that is brilliant, as they are Easter Courses not yet run, then yes they must be prepayments, so how do I process them on software to make sure they reduce profit?
Dr Accruals and Cr Creditors and then for new financial year, Dr Sales and Cr Accruals? Sorry bit confused with this bit!
The £3,000 is income, and as Bill's post implies, they may relate to services provided AFTER the year end - if so they should appear on your balance sheet, but as a creditor. In other words, you've received money from customers, and until you provide the service, you may be liable to pay them back.
This would keep your profit at £250.
I would also question whether there are any other deposits you've received that may be treated inthe same way.
No worries, you have helped me a great deal - its scary doing ltd co accounts for the first time. Am I right in that I dont need to have accounts prepared by an accountant as turnover low and I can submit both Co House and HMRC copy together online?
Yes provided isnt an audit you can prepare the accounts yourself and submit to Companies House and HMRC online.
Your accounts however will need to be in the prescribed format with the appropriate disclosures for both companies house (abbreviated accs) and hmrc (full accs)
and if you don't lodge your tax return before 1 April you will need to make sure the accounts are ixbrl compliant. which will probably be another question for another day.
cant remember what the exemptions for ixbrl are, but they are few and far between i think.
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Forgive the typo's I generally do not proof read. Just lazy I guess!
Oops, typo, meant to say creditors
