can you still use pen and paper?

keaton

When I get round to actually starting my business up I plan to use my own purpose made ( yet very neat and precise) accounts book made of paper, written in pen.

I plan to do this because it's easier for me, and I won't gave to back it up unlike a computer programme.

Is this frowned upon by hmrc as possibly unproffesional or do they not see it any differently?

pjclar02

No. It may cost you more in terms of your own time costs and accountancy fees, but ultimately it is as good as an Excel spreadsheet

da_rule

Well unless HMRC audit/spot check you it won't matter to them. Your accountant may not like it, and if they charge by the hour and it takes them longer then it may cost you more. And not having a backup may also cause problems should you lose the accounts.

keaton

da_rule wrote: »

Well unless HMRC audit/spot check you it won't matter to them. Your accountant may not like it, and if they charge by the hour and it takes them longer then it may cost you more. And not having a backup may also cause problems should you lose the accounts.

Thanks, why would hmrc dislike it if there was a spot check? It would be no harder to understand than if it were on a computer screen and it would all be checkable against my PayPal account and the receipts I have.

System

I don't think da_rule was referring to HMRC; they won't care whether you use paper or electronic files. It's your accountant that may not like it, as I'd guess it's a lot more work than if your accounts were electronic. You're the customer though, so I wouldn't worry too much about what your accountant feels about it, if you're happier with paper.

Pennywise

If your business and book-keeping is simple, then absolutely no reason why you shouldn't use pen and paper - it worked for centuries before Microsoft! Just remember that you still need it to be logical, coherent and do the job - a simple list of in's and out's probably isn't enough - you need the analysis of what each transaction was for, and also maybe the extra dimension to differentiate between invoice date and payment date - that kind of thing is easy with a database but hard with pen and paper. I'd suggest you look at some of the accounts books - most stationery shops have them - it used to be a choice between Simplex and Evrite, but a well planned cathedral analysis book is also fine.

But, at the end of the day, you'll spend more time, you're more likely to make mistakes and your accountancy fees almost certainly will be higher if you use any kind of pen and paper system. You also have to remember that the "interface" between you and HMRC is now virtually all computer/internet based - so if you become VAT registered or employ anyone, you'll need to submit returns to HMRC electronically and the best and simplest way to do that is with software!

Computers and software are a tool to make your life easier - why wouldn't you want that? There's so much free and cheap "proper" software around these days, it does seem a little odd that you'd want to do it by hand. The days are long gone when your only option was the expensive, horrible and hard to use Sage offerings - thank goodness the world has moved on and we now have literally dozens of software choices all well within the price range of a start-up.

PlutoinCapricorn

By using a simple Excel spreadsheet, I can log expected payments and expenses: I put them in italics and change them when they appear on my bank statements.

However, I do create to-do lists for housework and errands etc. and they MUST be hand-written! There is something satisfying about ticking things off and crossing them out with a pen.

keaton

Pennywise wrote: »

If your business and book-keeping is simple, then absolutely no reason why you shouldn't use pen and paper - it worked for centuries before Microsoft! Just remember that you still need it to be logical, coherent and do the job - a simple list of in's and out's probably isn't enough - you need the analysis of what each transaction was for, and also maybe the extra dimension to differentiate between invoice date and payment date - that kind of thing is easy with a database but hard with pen and paper. I'd suggest you look at some of the accounts books - most stationery shops have them - it used to be a choice between Simplex and Evrite, but a well planned cathedral analysis book is also fine.

But, at the end of the day, you'll spend more time, you're more likely to make mistakes and your accountancy fees almost certainly will be higher if you use any kind of pen and paper system. You also have to remember that the "interface" between you and HMRC is now virtually all computer/internet based - so if you become VAT registered or employ anyone, you'll need to submit returns to HMRC electronically and the best and simplest way to do that is with software!

Computers and software are a tool to make your life easier - why wouldn't you want that? There's so much free and cheap "proper" software around these days, it does seem a little odd that you'd want to do it by hand. The days are long gone when your only option was the expensive, horrible and hard to use Sage offerings - thank goodness the world has moved on and we now have literally dozens of software choices all well within the price range of a start-up.

That's what's mostly putting me off, the fact that the software can be a massive learning curve and can be very tricky to learn.

And as stupid as it makes me sound, I have no idea how to do one in excel.

zygurat789

keaton wrote: »

That's what's mostly putting me off, the fact that the software can be a massive learning curve and can be very tricky to learn.

And as stupid as it makes me sound, I have no idea how to do one in excel.

The simplest form of accounting system is the analysed cash book.
Record ins in about 4 columns on the left and outs in 10+ cols on the right.
If you look at the cash book you will see it is remarkably like an excel screen and excel adds up each month for you.

Pennywise

Even simpler is the free cash book software from https://www.vtsoftware.co.uk which has the look of a spreadsheet but the power of a database, and it even comes with template list of accounts. It's very easy to learn and use and what's best, it's easy to click and correct mistakes. We use it in house and it's always our first suggestion for clients who have simpler book-keeping needs.

keaton

That sounds perfect I'll look into that, thanks.