Getting organised - new contractor

[Support Monkey]

Also, what method of organising files on your computer works well?

Sorry i must have opened up the wrong forum I thought this was for IT contractors

Seriously though its a good question as it can be pretty tricky and i can see why some people may lose sleep over it

1 Folder on computer with company name on, everything electronic goes in there, end of year put it in a folder with the year on it,

1 folder (blue display folder from STAPLES, get a receipt) all the paperworkgoes in there, end of year transfer folder contents to Filing box (WH SMITHS, get a receipt) write the year on it with a big marker pen (get a receipt for that as well) and put it in the loft with the previous years

2 email address business and Personal but they both come in to the same inbox if you need to know how to split the emails you perhaps should be thinking of alternative employment

[Aman]

Your Local Enterprise Council and bank will have free books and material on running accounts of a small business.

If you don't prepare your own year end accounts then your aim is to have things organised just enough for an accountant to prepare the Y/E accounts.
Keep a note of due dates for year end accounts P11Ds, Shuttle Returns, Self Assessment etc and set alarms if necessary.

If you have many clients and are reselling or have purchasing requirements for each client you should see an accountant to produce a "chart of accounts".

Henceforth, I'll assume your business affairs are straightforward.

It's far less paperwork billing monthly.


If you have space (and funds) invest in a filing cabinet or metal locking shutter cabinet and a shredder.

You may want to use a PC based accounting package like Sage.

Bank Statements
Most recent at front.

Sales Ledger
Lever arch folder
Invoices sent out go in the sales. Organised by date paid up.
If remittance advice is received from client, file RA note with invoice. If you have one client it's not work bother even having monthly dividers.
Write up sales income in cashflow sheet.

Purchase Ledger
Lever arch folder with monthly dividers
Utility bill front sheets filed by month. The accountant / auditor has no need to see the itemised telephone call statements, so no need to file them in accounts.
Receipts for payments by Company cheque filed by month. Write CHQ <cheque no> on receipts.
Ditto company debit card. Write DBT on receipt.
If capital items note the serial numbers of these big ticket on receipts (and in inventory).
Little receipts (in size not value ) I used to tape to an A4 sheet.

Ledger front (work)sheet: List each transaction (overview) eg
18 August 2010| Ryman | stationery | £10.00 | /2.00VAT | 12.00
rather than itemising box of staples, 1 roll of sellotape….
As they occur or at end of week write up in cashflow sheet.

Inventory
Secured spreadsheet with
Purchase date | vendor | item | model no | serial number | security markings | location of security markings.
You may wish to photograph items.

Expenses claimable from client
Plastic zip bag until billing run.

Expenses (not claimable from client)
It's a little easier to bookkeep direct and indirect expenses if you have a business debit card. Business expense transactions will appear on your bank statement so you're less likely to miss transactions at year-end. I didn't have a company debit card and with less places taking company cheques better and online prices, I found myself having to buy capital items on my own card then claiming as expenses.

I put receipts for out of pocket expenses in DL envelope with yyyy-mm
At the end of each month fill in Monthly expenses (spreadsheet) form and staple printout to envelope.

My monthly expenses form is sectioned into travel | hotels & subsistence | professional fees & training | motoring | ICT | sundry items. You could pick a form off most umbrella company's website and adapt to suit your business area.

I file all the monthly expenses envelopes in Fox's Favourites (perfect for sharing) biscuit box 1kg or Jacobs Biscuits for cheese 1kg box until Y/E. They are the right width for DL envelopes

Add in subtotals to cashflow.
Copy of monthly expense report posted in Expense Folder (Lever Arch)
Totals for each employee listed in front sheet.

VAT
VAT ledger I keep with all Y/E accounts in a lever arch. A sheet with whatever was entered on all the VAT forms.

Every three months
Add your VAT paid
Add up VAT charged
Submit VAT form (the easy tax)
Enter amounts in cashflow sheet.


Payroll
I worked out a small nominal salary amount, asked the IR (now HMRC) the Tax and NI contributions were for that and paid by standing order to save any nasty surprises at end of year.

Correspondence (non transactional)
Lever Arch file with correspondence from each organisation kept together, most recent at front.

I relegate accounts from 2 years ago onto treasury tags and file in a metal box, with silica gel sachet to make little more secure against rodent and damp damage and partially secure against fire damage.
Keep all accounts for 7 years and a day.
Shred, burn or otherwise dispose of securely.

[DS23]

good work aman. have a banana

[cojak]

Yeah, not bad.

I rarely scan expenses anymore, I have an iPhone app (Expense Tracker) that can log an expense entry and attach a photo of the receipt.

Then at the end of the month I'll post an excel .csv file to myself along with all the attachments.

Sorted.

[Xenophon]

I use a miniature Filipino ladyboy to do all of my filing.

[CheeseSlice]

Expenses (not claimable from client)
It's a little easier to bookkeep direct and indirect expenses if you have a business debit card.

You have a business debit card? I didn't think any banks did this, just credit cards. If so, who with?

Thanks.

[FiveTimes]

You have a business debit card? I didn't think any banks did this, just credit cards. If so, who with?

Thanks.

I have a business debit card with Alliance and Leicester.

I would have thought the debit card was easier that a credit card ?

[Aman]

You have a business debit card? I didn't think any banks did this, just credit cards. If so, who with?

Thanks.

I don't but I know some business banks do them. I wrote in past tense because my company is dormant and I'm no longer with that bank. Business debit cards will probably become more prevalent as business cheques are phased out.
I really wish I had one when I was trading as it would have made expenses a lot simpler. I missed some relatively large transactions on expenses because I didn't [edit: have a business debit card] or because I misplaced receipts or didn't check transactions on my personal accounts.
With payments on company cheque you don't have to dig out the stubs to trace a payment only to find out you didn't fill in that particular stub.

*BoS shut down my business account because I made a complaint. They were excellent in 1996 but deteriorated since Halifax merger.
The FT publishes business bank account information two or three times a week but I'm not sure on which days.