Time spent on sole trader accounts

glt1

Hi all,

My partner is a VAT registered sole trader who has been trading for about 10 years.
I'm considering taking over doing his accounts for various reasons, not least to save the large fees he's paying at the moment.

I have no experience in book keeping or accountancy, but am pretty confident his accounts are straightforward enough to handle. I'm happy using Excel and am thinking of setting my spreadsheets up on there.

I'm wondering if anyone can give me an idea of roughly how much time I can expect to spend doing this? My plan is to input receipts, invoices etc once a month to keep on top of things, and then there's the IR online self assessment once a year...
A ballpark idea of hours this might take up would be really helpful - I don't want to bite off more than I can chew!!

Thanks, Gill

PlutoinCapricorn

It is impossible to say without knowing how many transactions there are per year.
Is he buying and selling many items? If the income is over a certain amount, HMRC require details, otherwise they just want 3 totals which makes things much faster.

Doing everything once a month is good practice. Why not give it a try just to see?

I spend around 20 minutes per month on my records, and filing the tax return takes around 20 minutes as all the figures are ready on a spreadsheet.

I am lucky because I am not VAT registered and just get consultancy payments here and there.

Pennywise

Presumably he's doing no book-keeping at all at the moment and paying his accountant not only to do his year end accounts/tax but also the book-keeping?

A far better solution would be to approach the accountant and ask them for their advice regarding doing the book-keeping yourself, with them just doing the year end stuff. That should drastically reduce their charges, and you would get told exactly how the book-keeping should be done, i.e. which software to use etc.

With all due respect, there's a reason why accountants spend years training and studying to become qualified. A quick and easy look through these fora shows how complicated things can get for even for simplest of business and more importantly often highlights monumental foul ups that cost the business a lot of money if mistakes are made or if tax saving opportunities are missed. There's a lot more to accounts and tax than putting the invoices on a spreadsheet - that's simply creating a list of invoices - it's not book-keeping! You should work backwards from the tax return you'll have to complete so that you know what categories you need. You should also read through the self employment tax return helpsheets as you'll need to learn the difference between capital and revenue costs and the differing tax treatment of capital assets. You'll also have to learn the fundamental basics of accounts preparation, such as providing for unpaid bills & invoices, bank reconciliations, adjustments for stock and work in progress, accruals & prepayments, and depreciation. Not for the faint hearted! Far more than a simple list of invoices!

If you don't find your accountant approachable or they don't want to help you help yourself, then easy enough to change to another accountant who is more amenable.

glt1

Hi,

Thanks for your replies.

Working backwards from the tax return sounds like a sensible idea, and hopefully will give me an idea of how complicated it will be.

My dad is a qualified accountant and he's going to help me get set up and seems pretty confident the accounts are simplistic enough for me to manage. But because he's such a whizz I was worrying that he would be underestimating just how much work this would be for someone without his experience.

Part of the reason I'm keen to take over the accounting is because his current accountants have not been claiming all the tax-deductible expenses possible. For years. This is partly lazy accounting and partly my partner's lack of interest in all things financial!

If it all looks a bit much and I end up just taking over the book-keeping, I think we'll be looking for a new accountant.

I'd better get reading some self assessment help sheets!!