UK Sole Trader Accounts

by Jeff Usher

Posted: 16 years ago 24 replies

INTERNET MARKETING

Hi Guys,

I'm trying to get organised and do accounts etc but am finding a lot of shortcomings in the software / online accounting packages I am trialling.

Some do not handle multiple currencies, so I have to record every PayPal sale converted to GBP. The accountant said this is OK but it's annoying.

Most do not seem tailored to the way the internet works and more for the way a real. physical business works i.e. ones with assets, sub-contractors etc etc which seems to overcomplicate the entire process. So far I've tried Microsoft Small Business Accounts ( too bloated ), DIY Accounting spreadsheets ( too real-world based ), Kashflow ( multiple currency problems ), FreeAgentCentral ( currently the winner, but £15 a month )....

Can anyone in the UK recommend a good Sole Trader accounts package or system that can be tailored well to the way internet businesses work ?

I was just thinking of doing it the good old fashioned way and just record it all on a spreadsheet, recording the income received and transferring 25% for tax and other stuff to be kept aside.

I like the idea of an online system as I can then just let the accountant have access and start earning the £30 a month I'm starting to pay them ;-) But these cost £15 a month - so my accounting bill would be £45 a month for the software and real person combined.

I'd like to keep the accountant ( obviously ) but find some software that's a one-off purchase to record everything as simply as possible.

Any advice appreciated.

Regards

Jeff

#accounts #sole #trader

Neil Morgan 16 years ago

Hi Jeff

I went through this process years ago and settled on Quick Books Professional - I chose the Professional version because it handles multiple currencies whereas the Standard version doesn't.

Cheers,

Neil
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- TelegramSam 16 years ago
  
  Keep it simple.
  
  It sounds like you are making things too complicated for the level of transactions you are suggesting.
  
  There is nothing wrong with using a spreadsheet to record all the income and expenditures.
  
  The simplest thing is to have a business bank account if you dont's already, and just make sure your spreadsheet agrees with what goes through the bank account.
  
  This will basically summarise for your accountant everything that went through the bank account and all he has to do is double check a few things and do a balance sheet if you have assets or liabilities worth mentioning.
  
  I know businesses with turnover in the hundreds of thousands and even over the million mark that operate as simply as this. Mainly because they don't have to track debtors and creditors as all the income is paid immediately by customers etc. etc.
  
  Sam
  
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  graham41 16 years ago
  
  Ditto- i completely agree with this
  
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Kim Standerline 16 years ago

Jeff

I'm a lazy moo and I just give my accountant access to my paypal and biz account and take any other receipts over to her in either a shoe box or carrier bag

However I do believe she keeps everything in $ on her spreadsheet and then just looks at the avarage currency convert for a specific period and uses that (if it makes sense). She checked with the Inland Rev and they were fine with that

Also even though she has a heap of fancy accounting software I know for a fact she uses spreadsheets mostly

Cheers
Kim
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Jeff Usher 16 years ago

Thanks Guys,

I've just emailed the accountant my spreadsheet. I'm a firm believer in K.I.S.S. so I'm just going to do that, keep it nice and simple.

99% of stuff is run through PayPal anyways so transaction history is not a problem.

Thanks for the advice. You just saved me £15 a month ;-)

Regards

Jeff
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Riz 16 years ago

As the majority of our Intenet Income comes in USD it is beneficial for accounting purposes to open a USD Account at your bank.

This allows you to set a book rate in your accounts and enter an exchange gain or loss through your accounts.

The main advantage is you can transfer money into your USD account as and when you feel the exchange rate is most favourable.

Riz
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- Neil Morgan 16 years ago
  
  The problem I found with using spreadsheets was that you still have all the leg work to do when it comes to VAT returns and the like, particularly with the VAT tracking when you're buying and selling to countries all over the world.
  
  With a decent bit of accounting software, you click a button and out it all pops. And I do mean that literally. The big job you have is entering all your transactions - the delightful Helen in our office is in charge of that.
  
  Sure, that's some way down the line but the BIGGEST problem I had was switching from spreadsheets to an accounting system. At the time, I wished I had started off with the accounting system which, of course, seemed like overkill at the time.
  
  However, if you're going to involve an accountant to do all that for you, maybe these are moot points.
  
  Cheers,
  
  Neil
  
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Neil Morgan

16 years ago

Hey Riz

I got a US dollar account from Halifax/Bank of Scotland for just that purpose.

Then I found that PayPal wouldn't let me associate it with my PayPal account, probably because they want to force you into their exchange rates which are never as good as the bank rates.

Cheers,

Neil

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Riz

16 years ago

Hi Neil,

Thanks for the info. I was not aware of that.

I was in the process of setting up a USD account via Clydesdale Bank but it kind of defeats the purpose if i can't attach it to my Paypal account.

Riz

Originally Posted by Neil Morgan

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Looks4U 16 years ago

For your basic sole prop accounts, i would simply use Excel. Other packages will over complicate things.
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Bev Clement 16 years ago

If you are going to use any software always talk to your accountant and find out which they recommend, because it will save you money in the long run. We used to recommend Sage which is one of the easiest to use.

But as far as your $ income it isn't a problem, it has been and continues to be acceptable to have a $ account on your accounts where a rate is used to convert it to pounds.

Kim, you're the dreaded shoebox person, at least you don't have a chippy which sends in the oil stain, stinking invoices to be sorted.

Bev
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Neil Morgan 16 years ago

But as far as your $ income it isn't a problem, it has been and continues to be acceptable to have a $ account on your accounts where a rate is used to convert it to pounds.

Hey Bev

That's what I was refering to. They want to use their US dollar account with their exchange rate. They won't let you associate an external US dollar account then transfer dollars directly into it. And typically, their exchange rate is a few percent out (in their favour of course).

Riz - I actually spoke to PayPal about this and they confirmed it wasn't allowed.

Cheers,

Neil
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Bev Clement 16 years ago

Hi Neil,

I was answering Jeff in terms of having to convert all the payments and expenses through PayPal, not having a US$ account, sorry it wasn't clear.

Being an accountant, I assume everybody understands the P&L and B/S.

Bev
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Neil Morgan 16 years ago

Hi Bev

Makes sense now. I didn't have my glasses on so missed the "s" on "your accounts"

N
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Bev Clement 16 years ago

Neil, if I had my glasses on then I wouldn't have seen what I typed

I'm looking forward to getting my head stuck back into Tax for IMers now I'm back in the UK. Tolleys here I come

That's a joke before anyone thinks I'm nuts to get back into Tax Accountancy and Forensic Accountancy.
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TelegramSam

16 years ago

Don't forget that in the UK there is the Flat Rate Scheme available for VAT purposes.

It can be a god send in terms of less administration for smaller businesses.

Having said that, if you have a lot of international income from outside Europe than it may not be a good scheme to join.

Sam

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Jeff Henshaw

16 years ago

However I do believe she keeps everything in $ on her spreadsheet and then just looks at the average currency convert for a specific period and uses that (if it makes sense). She checked with the Inland Rev and they were fine with that

That is correct. I always use the above method when accounting for all foreign currency income in an accounting or tax year. I am based in the UK.

I have used the same method for years without a problem. Sods law, now I've posted this, I'll probably end up in prison.

Promise you'll visit me

Jeff.

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n7 Studios 16 years ago

Have you looked at any online based invoicing systems, such as Freshbooks?

I know they support multiple currencies, but not sure whether they'd contain the other functionality that you need.
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Bev Clement

16 years ago

Jeff, unless they changed the law, we did this for any client who had multiple currencies for their income. This was standard practice in accountancy firms. It didn't matter whether I worked for KPMG or a smaller practice, the same formula was used.

Bev

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Jeff Henshaw

16 years ago

That's good to know Bev.

Thanks,

Jeff.

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Kim Standerline 16 years ago

Shame, I was lookin forward to bringing you a cake with a file in it

Originally Posted by Jeff Henshaw

That's good to know Bev.

Thanks,

Jeff.

Bev are you setting up as an accountant again, if so you'll be an absolute boon for Im people as I know for a fact many accountants don't have a clue when it comes to income on the internet. My accountant is brilliant now, (but I had to train her lol)

Bet you could start a biz up just using British warriors!

Kim
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Bev Clement 16 years ago

Kim, no plans to go back into accountancy. But, I might spend some time and put something together so IMer can train their accountants.

Bev
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Jeff Usher 16 years ago

Excellent idea Bev ....

There's a spreadsheet just waiting to be written in here somewhere ;-)

Jeff
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UK Sole Trader Accounts

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