Accountancy - a basic guide?
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Accountancy - a basic guide?
Yeah, me again. My latest accounts (the first with the nice accountant) have just been prepared. It highlighted a few further confusions from the previous accountant but we have got through those. What it really highlights is how completely bemusing I find the whole thing. It's like looking at a foreign language. I have such difficulty relating what the accounts say about a period of time from October '15 to october '16, to the reality of how my bank account looks now (9 months later).
The accountant is away on holiday a bit in the next few weeks, then I am away, so I've asked if we could chat through some basics in more detail in September, which she's kindly agreed to. In the mean time, does anyone know of a suitable basic introduction to accountancy I could gen-up with? I don't need to DO the accounts (although I do need to do invoices, and identify and label outgoings and incomes in the online software), I just need to get a better grip of what it all means.
The accountant is away on holiday a bit in the next few weeks, then I am away, so I've asked if we could chat through some basics in more detail in September, which she's kindly agreed to. In the mean time, does anyone know of a suitable basic introduction to accountancy I could gen-up with? I don't need to DO the accounts (although I do need to do invoices, and identify and label outgoings and incomes in the online software), I just need to get a better grip of what it all means.
- bramblerose
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Re: Accountancy - a basic guide?
Does your online software give you reports? Like a profit and loss which you can then filter by month? That would give you some idea of what each month is looking like.
I don't have much to input now but I do make sure that I label any of my expenses (my only outgoings) per month, so mobile phone costs would be "Mobile Phone June 2017" and my invoices are always dated at the end of the month, so I can quite easily see how much went out, how much came in and what my profit(!) is.
What software are you using?
I don't have much to input now but I do make sure that I label any of my expenses (my only outgoings) per month, so mobile phone costs would be "Mobile Phone June 2017" and my invoices are always dated at the end of the month, so I can quite easily see how much went out, how much came in and what my profit(!) is.
What software are you using?
Do not walk behind me, for I may not lead. Do not walk ahead of me, for I may not follow. Do not walk beside me either, just fuck off and leave me alone.
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Re: Accountancy - a basic guide?
It does give me reports, but I never fully understand them.
I think one of the problems is that the original accountant was adamant that I should include work in an accounting year that I had done (started, to be accurate) not what I had invoiced for. This involved giving her a list of invoices to include and which to exclude. The new accountant was totally bemused by this and said as long as everything gets accounted for eventually it doesn't matter, but for now we've gone with the old system because we were short of time and it was all massively confusing me (I intend to make an adjust in the next period so that its simpler in the long run). This meant that the figures in the software aren't easily 'readable' because the income for a given period as shown in the accounting software doesn't align with what will be in the accounts. Does that make any sense whatsoever?!
I'm using Kashflow.
I think one of the problems is that the original accountant was adamant that I should include work in an accounting year that I had done (started, to be accurate) not what I had invoiced for. This involved giving her a list of invoices to include and which to exclude. The new accountant was totally bemused by this and said as long as everything gets accounted for eventually it doesn't matter, but for now we've gone with the old system because we were short of time and it was all massively confusing me (I intend to make an adjust in the next period so that its simpler in the long run). This meant that the figures in the software aren't easily 'readable' because the income for a given period as shown in the accounting software doesn't align with what will be in the accounts. Does that make any sense whatsoever?!
I'm using Kashflow.
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Re: Accountancy - a basic guide?
I know I sound incredibly thick. Maths was never my strong point and even though my accounts are relatively simple on the whole, I find it so difficult to understand.
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Re: Accountancy - a basic guide?
Do you have a profit and loss sheet of your own? (Our accountants have their own obvs but I like to run my own just to check their figures).
If you like I can send you ours - you can tailor the dates to align with your year and it has very simple incomings and outgoing columns and then profit and cumulative profit if that would help you.
If you like I can send you ours - you can tailor the dates to align with your year and it has very simple incomings and outgoing columns and then profit and cumulative profit if that would help you.
- H1ppychick
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Re: Accountancy - a basic guide?
Smal it sounds like your first accountant was applying strict accounting principles (you recognise the turnover in the period you did the work rather than when it's billed) whereas your new one is proposing being much more pragmatic. The first one is strictly correct but it's completely overkill for a small business.
If you have specific questions you want to get a view on before your accountant comes back and I can help at all, please feel free to PM me. I'm a chartered accountant by profession so I can hopefully at least give you some basics if you want.
If you have specific questions you want to get a view on before your accountant comes back and I can help at all, please feel free to PM me. I'm a chartered accountant by profession so I can hopefully at least give you some basics if you want.
- bramblerose
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Re: Accountancy - a basic guide?
You don't sound thick at all, it sounds like your old accountant was a bit batshit which we all know she was!
I am a sole trader and if I run a P&L report for any given month or even for the year, I will have sales less expenses which will gives me my net profit. So, I know my sales for the year are £X and that I have spent £Y on mobile phone, broadband and fuel.
I get confused when reading figures so I think you sitting with your accountant and asking her to explain things to you would be best.
I am a sole trader and if I run a P&L report for any given month or even for the year, I will have sales less expenses which will gives me my net profit. So, I know my sales for the year are £X and that I have spent £Y on mobile phone, broadband and fuel.
I get confused when reading figures so I think you sitting with your accountant and asking her to explain things to you would be best.
Do not walk behind me, for I may not lead. Do not walk ahead of me, for I may not follow. Do not walk beside me either, just fuck off and leave me alone.
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Re: Accountancy - a basic guide?
I don't. All I do is keep a record of the quotes that I send out, which I'm appointed to, when and how much I have invoiced and if I've been paid that. So its not a total record of turnover (because some invoices also include costs which I pass on) nor does it include outgoings (though obviously all that is logged in the online kashflow thing). So That would be good, if you don't mind, Mayday.Mayday wrote:Do you have a profit and loss sheet of your own? (Our accountants have their own obvs but I like to run my own just to check their figures).
If you like I can send you ours - you can tailor the dates to align with your year and it has very simple incomings and outgoing columns and then profit and cumulative profit if that would help you.
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Re: Accountancy - a basic guide?
Thanks Hippy! I might do that. I kind of don't understand what exactly I'm struggling to understand, if that makes any sense at all. I think my main confusion now is to do with dividends and what has/is happening to them. I'll see if I can word a suitable PM to you to ask. But thank you, I really appreciate it.H1ppychick wrote:Smal it sounds like your first accountant was applying strict accounting principles (you recognise the turnover in the period you did the work rather than when it's billed) whereas your new one is proposing being much more pragmatic. The first one is strictly correct but it's completely overkill for a small business.
If you have specific questions you want to get a view on before your accountant comes back and I can help at all, please feel free to PM me. I'm a chartered accountant by profession so I can hopefully at least give you some basics if you want.
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Re: Accountancy - a basic guide?
Absolutely no problem at all. If you PM me your email I'll send it over. I also have an expenditure sheet with categories which might help too.
Also, how often do you see your accountant? We go to visit ours once a year to go through our accounts. Its always really useful and I learn more everytime I go. Does your accountant offer anything like that?
Also, how often do you see your accountant? We go to visit ours once a year to go through our accounts. Its always really useful and I learn more everytime I go. Does your accountant offer anything like that?
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Re: Accountancy - a basic guide?
I find dividends REALLY complicated, it is always the tax credit element that I find confusing, but I think that has changed now (Hippy?)
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Re: Accountancy - a basic guide?
Not understanding accounts really doesn't make you thick, they are bloody horrible.
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Re: Accountancy - a basic guide?
Sometimes I think the steep learning curve involved with all this is leveling out, then I realise there's a whole bunch of extra stuff I don't know, but need to.