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Book keeping

 
 
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lyssa03
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Joined: 26 Mar 2012
Posts: 2

7 ants

PostPosted: Mon Mar 26, 2012 10:50 am    Post subject: Book keeping Reply with quote

Hi, im slowly getting to grips with bookkeeping before we start our business, but theres one thing im not to sure on is wages for the 3 partners. There is a 40/40/20% split and we will be paying ourselves a very small amount each until things are up and running, just for our mortgages ect ect. however i am unsure of how to 'document' wages my guess is to get a wages book (as it will be cash payment) for the proof and log it in the cash book as drawings??? please correct me if im wrong. Im also thinking end of year tax would be difficult if we dont have any documents for wages anywhere for each of us so is this where the wages book comes in?
Last thing, regarding the book keeping i need acash book, summary book, petty cash and wages book.... anything else?
Any advice or tips would be great at this stage, we will be starting our business in the mid april time.
Thanks
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Kay
President
President


Joined: 07 Jan 2009
Posts: 3079
Location: Mostly SE Asia
4173 ants

PostPosted: Wed Apr 04, 2012 3:59 pm    Post subject: Reply with quote

Book-keeping is pretty straightforward so don't worry about the process of it too much. You can ask more here if you need to.

However, your question is difficult to answer without knowing the legal structure of the business. I mean, is it a registered limited company or partnership, or is it a group of colleagues with an agreement to work together without creating a separate legal entity for their business?

Also, you mention 40:40:20 - are you referring to ownership, profit share, or entitlement to wages?

If you just want to keep records for an accountant to sort out later, then subtract from cash and add to wages in your cash book. For three people, I doubt if you need anything as formal as a wages book, unless you're going to be involved with the PAYE and NIC for the partners. Again, that depends on their status as company directors, partners or employees.

You could buy a cash book (or create a spreadsheet) to record all your income and outgoings. Split the expenses into different columns, such as stationery, advertising,wages, etc, etc, whatever expenses you have. Make sure you have a voucher to back up every payment.

It sounds as though you're going to be keeping the books manually. I'm not saying that's a bad idea, but it can be a heck of a lot easier if you get some software to take the hassle out of it. Unfortunately, most of the software systems I've test-driven are far too powerful for my own needs - with the resultant expense. I ended up designing my own customised spreadsheets.

If you don't know how to create your own spreadsheets for your business book-keeping, then get someone else to set them up and all you have to do is enter the data. Don't hire an accountant to do it - far too expensive. Many good VAs (virtual assistants) offer book-keeping services these days. Find a VA and ask them to get you set up.

However you go about it make sure that you keep good records of your financial transactions otherwise you may find yourself in a big heap of trouble when the tax man comes knocking.

Give's a shout if you need any more help and good luck with your business.

[Edited for clarity]
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Last edited by Kay on Fri May 18, 2012 11:51 am; edited 1 time in total
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Azolla
Secretary
Secretary


Joined: 21 Apr 2012
Posts: 13

16 ants

PostPosted: Tue May 08, 2012 7:51 am    Post subject: Reply with quote

For starting off I'd also suggest recording things on Excel spreadsheets.
These won't involve you in financial outlay, are easy to set up and use and you can ensure that everything is recorded ready for your accountant and the end of year accounts.
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