I have just started doing the books for them and we have the cash deposits in to the bank on one side, deposits for card transactions, a spreadsheet saying what the takings have been each day, a pile of invoices and receipts, one for card purchases which can easily be matched to the bank but I am unsure how to deal with the cash purchases!
They have obviously taken the cash from the till to pay for things before banking what is left.
Any ideas on how to simplify this? Do I process the receipts for VAT purposes then mark as paid against the bank? I am using Xero.
Hi again Trisha Can you add your name so it appears under the signature bar of your posts as I wont remember your name every time you post. Go via edit profile and then into the siganture section.
You should be entering your takings gross from your daily zs or spreadsheet into a cash register.
Then enter your purchases as you would cash purchases for any other business.
They will not be processed in the main bank, but I presume you have a cash register type bank account set up.
Then when cash is paid into the bank (net) you transfer from cash register to current account.
When the card receipts are processed by whatever card processing company they use you also transfer this from the cash reg to the current.
Simples as the ad says.
__________________
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
Then when cash is paid into the bank (net) you transfer from cash register to current account.
Hi Joanne
See, you can teach an old dog new tricks because I would have tended to separate these as a bank payment, but makes much more sense (and ease) the way you suggest. I'll be doing some of this over the coming months for a retail client, so Trisha's question was well timed
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Then when cash is paid into the bank (net) you transfer from cash register to current account.
Hi Joanne
See, you can teach an old dog new tricks because I would have tended to separate these as a bank payment, but makes much more sense (and ease) the way you suggest. I'll be doing some of this over the coming months for a retail client, so Trisha's question was well timed
Less of the old dog - more of a spring chicken John!
I do have one that I keep cash and card payments separate as that really aids card payments reconciliations, which is really the ideal way to do things.
You can set up the reports from the tills to show the corect splits on the 'z' reports (Zs are the till reports) produced at the end of each day to show whatever you need (including the different VAT elements on sales).
Biggest issues - staff forgetting to run the Zs.
- for restuarants/pubs/cafes - staff inputting the wrong thing sold in the first instance (VAT issues); new products not being entered into the till system plus the payments out that Trisha refers to - a properly set up document to be completed each day (excel format print) and proper training helps.
Sounds like you have won a new one there John. Well done and good luck with it.
__________________
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
Sounds like you have won a new one there John. Well done and good luck with it.
Not so much a new one but my market trader/internet sales client moved into a shop in March and it's taken off beyond her wildest dreams. She is very near the VAT threshold now so I need to get her set up and check procedures. (popping in there next week)
My only previous foray into using z totals is the two cafe's I used to have and a cafe I have now, but no credit/debit cards were on either.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Hopefully the VAT issue will not hamper her business moving forward.
One of her suppliers advised her how to mark up the prices so as to cover the VAT element, and she implemented that when she opened the shop.
A thought has just struck me though, at present we record her paypal sales as a monthly figure. Will that need to change when she's VAT registered? (accrual)
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Hi John
Paypal is just a payment portal so treat it like the bank. Where do the sales come from that feed into Paypal? Just thinking that paypal charge a massive fat wedge for processing anything so you would be looking at the gross sales, pre their charges anyway would you not?
In terms of the line by line - are you talking for MTD purposes or just generally re the VAT? If the latter - then a journal dump is fine. Not sure about MTD, not considered ebay/amazon stuff tbh (as I just dont touch it....realising Im getting more picky by the year!)
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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
Hi John Paypal is just a payment portal so treat it like the bank. Where do the sales come from that feed into Paypal? Just thinking that paypal charge a massive fat wedge for processing anything so you would be looking at the gross sales, pre their charges anyway would you not?
In terms of the line by line - are you talking for MTD purposes or just generally re the VAT? If the latter - then a journal dump is fine. Not sure about MTD, not considered ebay/amazon stuff tbh (as I just dont touch it....realising Im getting more picky by the year!)
Hi Joanne. All the internet sales are done through paypal. I take the monthly gross figure which is recorded into a VT bank account called Paypal, then deduct the paypal fee as one monthly total.
It's purely from a VAT pov, have a feeling they may want the info recorded daily, similar to z readings, or even worse, every sale. (1) I'm going to have to dust that VAT manual down, aren't I?
(1) I could be getting mixed up with the rules for VAT cash accounting.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
TBH John - I think we all have to wait a wee bit longer for the fine detail from HMRC, if they can ever be bothered to actually release any. My understanding is that even the stockbook situation for the margin scheme VAT is not clear - I certainly wonder how the commentary around the 'enter each line' of stock works with the likes of the Global Accounting Scheme. Ebay, Amazon and the really big internet sellers are going to have some fun if they have to start dumping thousands (hundreds of thousands) of entries into an Accounting package as well their other software - that could quite well crash some of the accounting packages out there.
I am assuming that you are able to get the internet sales direct from their own website in sort of csv file in case of need? That I suspect will be an easier route, as your VAT status is based on that. Then deduct the paypal fees much as you would normal bank fees (if Im even still making sense).
Have a look on the CIOT website - you might find some help on there. Although its still that moving bloody target isnt it!!!
__________________
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
