Keep Control of your business, having no accounts is like driving without a brake...
Don't forget the boring stuff
It may be very boring but every business needs to have an accounting package of some description. It needs to be done regularly and accurately to ensure that the money you take is accurately accounted for, so that you pay the correct VAT on time and that your suppliers get paid correctly When the time comes for an audit from HMRC you are ready.
There are lots of ways of doing your accounts now, there are some great online packages that make things very easy and you can see what's going on in your business on your smartphone at any time of the day. You can use your accountant or bookkeeper to do most of it, some of it or all of it. The more they do the more it costs. You need to weigh up how much it costs versus how much you can be earning or generating in the time that you spend doing the boring stuff.
Because we are cash businesses we tend to be quite high up on the HMRC audit list and because we are cash businesses it is sometimes much harder to control everything, so therefore it's really important that we get it right.
Firstly you need a good till system, you need to program the till system with the correct prices and VAT levels, most till systems will also allow you to workout margins and some will even manage recipe cards. A good till system will allow you to analyse your business in detail very quickly, which is critical in developing your business. You need to know how much you make on each line and know which are your most popular lines. You need to know how your staff are operating the till and a good till system will give you a great audit trail.
Some till systems will also interface with accounting packages, although this is not absolutely necessary but it does save time.
The first thing to do is to talk to your accountant about what accounting system they like to use and what system is compatible with theirs.
There are on line packages like Xero and standalone packages like Sage. Sage has also got an online option.
You must be registered for VAT with HMRC. You need some good advice about which Products are VATable, in general everything that is consumed on the premises is subject to VAT, and only a few products are not VATable if they are taken away from the premises. It's really important to take advice on this and make sure you charge the correct VAT.
Your accounting package will need to have all the sales and invoices put on the system regularly for it to be of any use to you. You need to set time aside every week to do this, either do it yourself, train somebody up to do it for you or send a big bag of invoices and receipts to your accountant or bookkeeper, either way without this discipline you will soon be in trouble.
It's critical that you meet your correct deadlines, you cannot be late with your VAT return, you cannot be late with your P32's, if you don't pay your suppliers on time they will freeze your orders and if you don't pay your team on time, then you won't have any staff to work in your shop.
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