The right level of accounting, outside of the accountants

[mouseorgan]

Hi,

I'm awful / total n00b at dealing with the financial side of my short contracting career, currently I'm just removing as little money as I need and keeping a drawer full of receipts. As discussed in other threads though, my VAT registrations have been done really badly by my (soon to be ex) accountants and from a family / personal life perspective as well, I'm looking at being more proactive with my accounts, to hopefully make me more effective with my money and just plain know more.

So, how much is a good sane level to be doing myself? I need to be creating my own invoices on a new contract, as previously I was doing this through an agency portal, but as I'm needing to do a bit of tracking myself, and also want to keep some awareness of my tax situation, I'm looking at using GnuCash to manage something, but I'm not sure how much. There's presumably a level at which I might as well be my own accountant, so don't want to do TOO much, not least because it gets too complicated for me (at present at least) if I'm working out my own dividends and salaries and expenses to an obscene amount.

Clearly I have two main sources of information - invoices and my business bank statements - oh and receipts I guess - to work from and don't really want to be entering anything in more detail than this, but I'm unclear what is a sane and reasonable level of work to be done simply for clarity and awareness. This also backs into questions like should I be reconciling every line item in my bank statement? At present I just have a set Standing Order to my personal account which presumably matches up exactly with nothing at all - dividends, expense etc... so paying too much attention to my bank statements would force me to be much more detailed in the actual movements of money rather than just totals of it. So maybe I should actually ignore my bank statements altogether and only work on invoice data? or ignore invoices?

Thanks

[cojak]

A good accountant will not only deal with basic bookkeeping as you describe but will also provide tax advice and keep you on the right side of the law.

But for bookkeeping purposes, take a look at Financial planning and accounts | Business Link and http://www.businesslink.gov.uk/bdotg...cId=1073860617

That will keep you going until one of the experts come back from holiday.

[Wanderer]

Have a look at SJD's spreadsheet. It's a free download (registration required) and it will tell you how much CT/VAT etc you have to retain and how much you can take as dividends. Update it every month and the accountant can work out the accounts at the end of the year.

[mouseorgan]

I have a similar monthly spreadsheet which seems reasonable, and I guess that is about the right level to deal with things at. That SJD one is a pretty chunky xls though, google docs doesn't seem to like it all that much. Maybe I just need to reformat it somewhat... Will certainly perceiver though, thanks.

Are these sorts of spreadsheet where those with paid accountants that others use in the main?

[SueEllen]

Are these sorts of spreadsheet where those with paid accountants that others use in the main?

I managed to speak to some contractors in other industries over the holiday it seems lots of people use spreadsheets.

I do know contractors who use proper accountancy applications but they seem to be accountants (who do everything themselves) and IT contractors.

[sktaxadvice]

An accountant should speak to you and then adapt their services to fit in with the requirements and needs of your business.

Templates and over complicated spreadsheet are not always necessary

[philip@wellwoodhoyle]

You could use Online Accounting Software: Small Business and Freelancers - FreeAgent which is aimed at contractors and is geared up for easy entry of time/expenses. The unique selling point is that it includes running totals of all taxes, corporation tax, PAYE, VAT and personal SA tax, so it will do all you need, except for the year end. Lots of accountants have now adopted it instead of clunky spreadsheets etc. We've been rolling it out over our client base for 2-3 years and have not had a bad word from clients about it.