Hi this is my first time posting on this forum and I would really appreciate any help and advise.
I've been asked to help someone prepare their monthly accounts and prepare their VAT accounts records, now I am by no means new to account as I have just completed my BAcc in accounting and have assisted with others account previously so I said I would do this.
However the person has just handed me a box of receipts and invoices and said that their VAT return is due to be submitted by the 7 July. It's a limited company that was reg last may and VAT reg in aug (they didnt need to reg for VAT but was advised to by an accountant due to the level of output vat) but didn't really start trading until April this year so most of the receipts are from start up costs. No proper records have been keep just loads of receipts and invoices which I have sorted into months.
Im maybe being silly as I know I should be able to do this but I'm feeling really unprepared and overwhelmed about where to start or even if I'm starting this right so any advice would be great.
Thanks Kim x
This is a classic "incomplete records" job - with the possible added complication of VAT returns?? (Is this the company's first VAT return: eg: Are you saying that they back-dated their VAT registration to last August OR did they register last August and have not submit any VAT returns since registration OR did they register last August, and you just need to do this, latest, quarter? )
Anyway, for the incomplete records part (assuming you have software and this is the first VAT return that has ever been submitted), I would do the sales invoices, then look at the bank statements (if you have them) and sort the receipts/purchase invoices into ones that went through the bank and the rest (that didn't). Then process those receipts/purchase invoices that went through the bank and do bank reconciliations as you are going along. Then deal with the rest of the purchases/expenses transactions. Then calculate the VAT return (if using software, this is quite straightforward - assuming you have input the VAT amounts (and VAT codes) correctly into the software - remember that generally you can go back 4 years for physical goods that you still have on-hand and 6 months for services)
Having said that, if you are having to reconcile to previous VAT returns, and if you have the working papers of a previous VAT return, I would work from those working papers, processing the transactions per the VAT return - still making sure that you have split the transactions into ones that went through the company bank account, and ones that went through as cash or directors own pocket. After each VAT return, calculate the VAT return on your software (and reconcile it or lock that VAT quarter (depending on your software) before moving on to the next VAT quarter.
(Please feel free to give me a ring, if you want to discuss)
Hi thank you for answering me. The company registered for VAT in aug last year and have never submitted a return. I'm not using accounting software as I have just finished Uni so am deciding what route I want to take now and dont want to buy software untill i decide, so was planning to use excel at the moment. There is only a couple of sales invoices as the company didn't start trading until April this year so it is mainly purchase invoices and receipts that date back until last may such as a business van, tools, safety clothing, fuel ect the company fits upgrades to vans and cars so these items where needed. The director paid for for all these expenses with his own funds which he wants to show as a loan to the company also. I hope this covers everything that you questioned.
Download vt cashbook (from vt software). It is free and will handle VAT.
Set up a bank account called "directors loan account" Process all the purchases that the director paid for personally through the aforementioned directors loan account. Process the sales/income through either the normal bank account or directors loan account (as applicable) (assuming it was immediate payment).
Vt cashbook doesn't handle credit, but for a small number of sales invoices, you could work around that)
good suggestion on VT but maybe rather than the Cashbook Kim should download the 60 day free trial of VT Transaction+. If at the end of the sixty days she doesn't buy the softeare she can always continue to use the Cashbook software but to me that one really doesn't feel like enough to run a bookkeeping business with.
Hi Kim,
welcome to the forum.
Don't forget that if you are offering bookkeeping services (even if to only one client at the moment) rather than being an employee of the company you must be registered for Money Laundering and perform know your client procedures.
Also a good idea to get some PII insurance (Try Arlington)
Also, has the client given you access to their VAT online filing or are they going to be doing that with you just telling them what to enter? (That's also a good way of ensuring that they are actually set up for online filing. It's geting very close to the date and you don't want to find out at the last minute that you can't actually give HMRC the data!).
All the best,
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Hi Shaun, Yes, I forgot about the 60 day trial of VT transaction+ which is obviously even better! (I agree VT cashbook isn't enough to run a bookkeeping business on...)
Thanks for your reply, I'm wasn't really going to start offering bookkeeping services it was only a favour to a friend but I will look into money laundering and PII insurance should I help a friend out again, just to keep me right. My plan is to work in practice to gain experience and start my acca exams hopefully this year if all goes well. I have worked through a good chunk of these account I think I was just panicking with them and someone pointed me in the direction of your goodselfs, but I have just went back to basics with these accounts and am doing cash books and journals for each transaction (most of them are cash transactions only in the past two months has anything been paid from the business account) then I will continue from there. Any further advise on this or if I am going about it the wrong way advise on how I should be doing it would be great.
