self employment / accountancy questions - need help please

[jobhunter7]

i've signed on... although i've been self-employed, i've been winging it a bit with doing my books a bit as i've made so little money. anyhow i'm supposed to fill in a supplemental form and it brings up these questions i'm stuck on:

• Has any money been received into the business since you or your partner last worked?

• Is the business regarded as a going concern by yourself, your bankers, accountant and creditors?

• Is there a profit loss and account for a 12-month period ending within the last year?

• Is there a trading account for a 12-month period ending within the last year?

• Are there any balance sheets for the last year?

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i do have books (of a sort) as i've made a record of what money has come in and kept receipts and invoices... perhaps there may be online examples of how i should have been laying things out properly so i can transfer the information across.

thanks

jobhunter
have a look at the link to my old ebay me page : there is a standard layout set of management accounts on there and LOADS of information about what can and cannot go into accounts

but yes, for tax return its box 1 and box 19 and that's all

Do think about moving your records to excel rather than word. Much easier to add things up and know they're right. You shouldn't need an accountant at this stage.

"I've got to go in next week, so I guess I can take in files with me and ask more information... but I have a slight aversion of alerting the authorities that I have been sort of making it up as i've been going along."

Well, you won't be the only one ;)

Take a look through your invoices and check whether your list of income received is complete. As long as you have paperwork to confirm each item (even if only a payment into your bank account), you can put this down as income received.

Then take a look through all your receipts. As long as you have paperwork to back up each item of expenditure - and it's a legitimate business expense - you can put it down as an expense.

Then deduct the total expense from the total income and - hey presto! - a P&L. As long as you've gone back and double checked that it's as accurate as it can be (and I second LittleBearPad's suggestion of moving it to Excel) then it should be all the documentation you need. If there isn't much paperwork then take all the invoices and receipts with you in a file, but the P&L ought to be sufficient.

Don't worry that you haven't been diligently recording as you go along - lots of people don't. It's really only necessary if you're actively managing your business and need to budget or plan. As long as you're not making any deliberately or recklessly false statements when required to submit information, it doesn't matter.

ok this doesn't sound as worrying as i thought - i appear to have been making p&l accounts almost by accident. what's the difference between this and a balance sheet.

A balance sheet is a bit more complicated as it depends a bit more on the accruals concept which your P&L approach doesn't. (A proper P&L is prepared on an accruals basis). However, keeping things simple...

A balance sheet is a snapshot of your business' assets and liabilities on a date. A P&L tells the story of how you get from one balance sheet to another.

In order to create one for your business you need to work out what assets you have (equipment, stock, cash, debtors ie people who owe you money) and your liabilities (creditors ie people you owe money to, debts of the business (not your personal debts), your investment in the business, the profit you've made).

Then you add the assets up and the liabilities and you have a balance sheet. The assets and liabilities should be the same number hence balance sheet.

It's not clear what your business is but if you're just doing services for people (i.e. cleaning for arguments sake) and being paid in cash you won't have stock, debtors or creditors. You'll have cash and "profit" and they should be essentially the same.

If you're making thinfs and selling on credit it's more complicated.

jobhunter
have a look at box 13 in the link
talkinpeace2.blogspot.co.uk/2014/09/here-is-list-of-questions-i-most.html
it shows what the Balance sheet looks like and how it relates to the P&L

But you have the option of just answering 'no' to the 'Do you have a balance sheet?' question. Which might be helpful in reinforcing that this isn't a business you rely on to provide you with a living.

the b&l sheet seems pretty straighforward... i think i could make a similar one pretty easy...

the balance sheet is a little more complicated to me

TYPO - should read p&l

i guess if what i've been doing is above board anyway seemingly, it should be okay going into the jobcentre with my files and a draft p&l sheet