Ive just started to look after three restaurants, 2 of which are based close together in Manchester. They are run through separate limited companies and mostly keep all the paperwork separate, apart from:-
1) Some of the food ordering to a couple of suppliers is done by the out of town restaurant and the food used by the city centre restaurant. The owner wants me to split the invoices 40 / 60 in the books. They are both VAT registered so my initial thoughts are we shouldnt do it. Then I wondered if we could do so by copying the invoices and claiming 40 / 60 from the business, so claiming VAT in these ratios - although then I wouldnt have a VAT invoice in the correct company name so that worried me. I then wondered about processing it through the out of town/VAT claim as usual and then creating sundry debtors/creditors each month to split out per the above ratio, but this wouldnt work as the Director is looking for more accurate Gross Margin figures for each restaurant and this latter option wouldnt provide that.
2) The staff are paid under separate payrolls for each company dependent on the restaurant they work for (hourly paid/part timers). On occasions the staff may have to work at the other 'branch' due to staff shortages etc. Again the Director is looking to apportion the cost out to the company that it relates to. Suggestions are possibly putting the payroll through the holding company and apportioning it out (with the holding company making a loss!) or do we do some kind of internal transfers between the companies?
Want easy/transparent/non messy methods if possible.
Anybody have any ideas? If you cant answer both question then would still appreciate your assistance with the one you can answer!!
Thanks in advance
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
1) Have you thought about recharging the costs via invoice between the 2 or 3 companies? this will remove any issues surrounding the VAT. Copying the invoices is a no no really as they will be addresses to one company only.
2) Again you could recharge via invoice as per point 1. Or you could treat the wages journals wholly through the initial company, but then make an adjustment to remove some of the cost via a journal crediting gross wages and debiting an inter company loan account in the balance sheet. you will then have to make the adjustment in the other companies as well and make sure it all agrees.
Hello Paul
I did wonder about re-invoicing (but only late Friday afternoon). Ive told the owner that copying the invoices is a no go and even suggested they try ordering items separately (although the latter seemed to go down like a lead balloon!)
Looks like, from the accounts already (before my time), that there is a lot of journals being done for previous such eventualities and its looks a bit messy and with the narratives that are in Sage its not now clear what some of these are for and Ive explained you cant rely on people's memories, so the invoice raising would get round that as it would be documented. Only question then in relation to the first scenario is in how to reduce the 'purchases' of the company who bought 'too much' in the first place so that the purchases figure/Gross margin is more reflective of what they have done as a separate business and without it causing any potential queries from the VAT man?
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
