Great at being self-employed but not quite so great at bookkeeping?
If you are self-employed but have neither the time nor inclination to keep computerised business records then you are not alone. There are millions just like you toiling away across the UK.
The last thing you probably want to do when you get home after a hard day at work or being stuck in traffic on the M25 is sit down in front of a computer fiddling with bits of paper.
Trawling through invoices and bank statements to enter them into a spreadsheet or computer program you don’t really understand isn’t your idea of fun.
Take my sister.
A self-employed beauty therapist working for well-heeled clients in central London, she calls me up.
I can hear panic in her voice.
“I could really do with some help printing out some invoices” she says “they are on my Iphone somewhere and I need to do my end of year figures to send to my accountant”
“I don’t have one of those hair printers, you got one of those don’t you?” she continued
“I think you mean air printers don’t you – and yes I have. It also scans in duplex and makes the tea. Call in when you are coming down to go to Mum’s on Friday and I’ll take a look”
Friday arrives and sure enough she appears like a whirlwind at my door and thrusts me her Iphone.
“I forgot to put it on charge so the battery is a bit low but there you go” she puffs.
“OK – so where are all these invoices then?” I enquire.
“They’re in emails from this lady in the accounts department at X company; I think her name is Anita something or other”
I do a search for “Anita” in her emails, eventually find a match and print out all the attached order forms and invoices I discover.
“That’s all I can find” I report.
“No there’s a lot more than that – try looking under Sarah Jones she was there before Anita but she wasn’t there very long. Oh and Sandra was there before Sarah but she kept getting everything wrong”.
Well about an hour and a half later and I was about as confident as Diane Abbott that I had them all.
I printed everything I could find out on my hair printer.
Looking at one of the invoices (Accountants can’t resist) I noticed that the Net figures for each product on most (but not all) of the invoices were greater than the Total figures. The more I tried to explain that this wasn’t correct, the more puzzled my sister became. Now she was getting agitated.
“Well I just don’t have time to check all their figures, I just take the total figure, add my margin and that’s what I charge my clients”
It took me a while to impress upon her the need to look at what she’s paying for and that in fact for the last six months she had been undercharging all her clients for the products she was supplying.
If my sister’s plight and laid back attitude towards all things figure related strikes a chord then I have some good and some bad news for you.
The good news is that in a couple of years you will no longer be scratching around at the end of your financial year in a blind panic looking for bits of paper you can’t find.
The bad news is that you will be submitting your accounts figures for business income and expenditure online on a quarterly basis to HMRC. And if you miss a quarter you’ll likely be fined.
The Making Tax Digital regime is soon to be upon us and the proposed start date for all unincorporated businesses with Turnover of over £10,000 but below the current VAT threshold figure of £85,000 ( (that’s you?) is the date your first new accounting period commences after 5th April 2019.
If your business is unincorporated with Turnover that is above the current VAT threshold of £85,000, then you probably already keep some form of records anyway but as things stand you will have to commence MTD a year earlier than that – that’s the date your first new accounting period commences after 5th April 2018 or just about a year away!
“OMG” I hear you exclaim “How on earth am I going to do that and retain my sanity?”
Well you’ll be turning to your Accountant for some help with that won’t you? They’ll know all about it and will give you all the help you need.
Well if your Accountant is THP that is………
Just like the Million Dollar Man (who remembers Steve Austin and the Bionic woman?)
We have the technology………..and the knowledge to sort you out and get you back on track.Whatever you need to get the job done.
So, within the next two years handing bits of paper to your accountant in carrier bags at the end of your year should finally become a thing of the past.
It’s a brave new world; just think of all those 5p’s you’ll save.