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The bookkeeper's year-end file: what your accountant wants

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Every year, accountants send the same list of queries to clients, and every year clients answer half of them. The year-end file is how you break the cycle: a complete, organised pack that lets your accountant prepare the accounts without a fortnight of emails. Here is what goes in it. The reconciled trial balance Start with the end of the bookkeeping, not the beginning: a trial balance where every balance sheet account is reconciled. Bank accounts tied to statements, debtors and creditors agreed to aged listings, VAT control agreed to the returns, PAYE control agreed to the payroll summaries, and the directors loan account with a full transaction listing. An unreconciled control account is a question your accountant will ask; a reconciled one is a question they will not need to. The supporting schedules Behind each material balance, a schedule: fixed asset additions with invoices, prepayments and accruals with workings, stock valuation with the count sheets, and hire purchase or loan s...
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Bank reconciliation: a weekly routine that keeps the books clean

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Bank reconciliation: a weekly routine that keeps the books clean   Why weekly beats monthly Most small businesses reconcile the bank once a month, usually in a rush just before the VAT return or management accounts are due. By then, errors have had four weeks to compound: a duplicated payment looks normal, a missing receipt is forgotten, and a fraudulent transaction hides among hundreds of legitimate ones. A weekly reconciliation changes the dynamic completely. Each session takes about 30 minutes, discrepancies are caught while memories are fresh, and month end becomes a non-event because the books were already clean. It is one of the highest-return habits in bookkeeping. The 30-minute weekly routine Block the same slot each week, ideally the morning after the week's bank activity settles. Work through these six steps in order: Refresh the bank feed. Confirm the feed imported all accounts and that the closing balance matches the bank's own figure. If the feed failed silent...
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Petty Cash Controls for Small Teams That Actually Work

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  Petty cash has a reputation problem. It feels too small to matter, which is exactly why it becomes the messiest corner of the bookkeeping. A tin of cash in a drawer, receipts stuffed into an envelope, nobody quite sure who took what last Tuesday. The amounts are small, but the discipline it teaches, or the habits it lets slip, run right through the rest of the finance function. Getting petty cash right is cheap and easy. Leaving it alone is how fifty-pound mysteries become audit findings. Run it as an imprest system The imprest system is the single most effective control and it costs nothing. You set a fixed float, say 200 pounds, and top it back up to exactly that amount each time you reimburse. At any moment, cash in the tin plus receipts must equal the float. If they do not, something is wrong and you know immediately. The alternative, topping up random amounts whenever the tin runs low, means the balance drifts and nobody can tell whether a shortfall is theft, error, or jus...
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Credit Notes Done Right: A Clean Process for AP and AR

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By John Thomas, Senior Accountant Credit notes are the unsung heroes of accurate bookkeeping. Every returned good, every pricing correction, every volume rebate ends with one, and every one that goes missing or gets mishandled leaves the ledgers wrong. Yet most small businesses handle credit notes informally: an email here, a netted-off payment there, no matching to the original invoice. Here is how to run a clean credit note process on both sides of the ledger. What credit notes actually do A credit note cancels or reduces an invoice that has already been issued. On the sales side, you issue a credit note to your customer; on the purchase side, your supplier issues one to you. In both cases it reduces what is owed and, where VAT applies, adjusts the VAT. The critical discipline is matching: every credit note must be linked to the original invoice it corrects. An unmatched credit note sitting in the system is a reconciliation problem waiting to happen, and a credit note applied to ...
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The VAT registration decision: a flowchart for growing businesses

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The VAT registration decision: a flowchart for growing businesses VAT registration feels like it should be automatic: cross the threshold, register, done. In reality it is a genuine fork in the road. Registration is compulsory above £90,000 of taxable turnover but voluntary below it, and that voluntary choice can either save you real money or cost you margin, depending on your customers. Here is the decision laid out as a flowchart you can walk through in order. Start here: the compulsory threshold test The first node is not a choice: you must register for VAT if taxable turnover goes over £90,000 in any rolling 12-month period. Note the rolling part: this is not your accounting year, it is any consecutive 12 months, checked at the end of every month. Once you cross it, you have 30 days from the end of that month to notify HMRC. The second compulsory trigger is the forward-look test: if you expect taxable turnover to exceed £90,000 in the next 30 days alone, say from a single large...
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