Could anyone comment on my query. I know it may sound simply, I would just like to get some feedback on what would be the norm.
I've created a purchase code to cover "professional fees" these include accountancy, bookkeepig ,bank fees, solicitor fees. Would you ordinarily break these types of purchases down into their own purchase codes or is this acceptable to group these types of purchases?
These are all overheads - depending on the amount of such fees going through the accounts you could lump them together, but if you really wanted to be ultra efficient and see more detailed expenditure you could, as you have suggested, create different codes.
The choice is really down to you. I use both processes, all depends on the client.
The reason for the question is that an accountant that I deal with has created these codes and not communicated with the client and myself the bookkeeper that they have done this and for what reasons.
I don't myself see the need to break these codes down as detailed. Making extra work I feel, although I can see that maybe separating banks fees could be useful as a breakdown for the end of year accounts submission.
Hi
I always keep Bank charges and interest under a separate heading to the professional fees. With some clients I keep the bookkeeping fees separate fom the accountants fees but still the 'prof fees' heading - as Julie states - the choice is yours/your clients. Maybe the Accountant has set it up just to help start them off, for the person dealing with the day to day to consider expanding them out. Eg I have a client who has started invoice discounting since I took them on, so now I separate their fees out under the general Bank charges and interest heading, so they can see the difference between the two providers. Horses for courses.
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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
Generally you would have something like an expense for legal and professional fee's. Solicitors Fee's would go under that and hypathetically for small companies accounting & bookkeeping fee's (both really the same thing) could be bundled in with that although traditionally they are shown seperately.
The reason that accountancy fee's are shown seperately is that for larger companies its a legal requirement for them to be shown seperately so in accounting software they have become seperated for all entities.
Bank fee's are not professional fee's but finance costs. You would not bundle those in with professional fee's.
For that last one think of that from the perspective of the cashflow statement where finance costs come under a seperate classification. If they are not stored seperately then one would need to seperate them out in order to produce a cashflow statement which is a legal requirement for any company reporting under IFRS.
kind regards,
Shaun.
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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.
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.
Again many thanks for your comments Joanne and Shaun. It's a great help when your on your own to ask what seems like silly questions so as to get other peoples knowledge/comments.
