Bookeeping of Personal Items Sold, Changes to Bank Account & online sales fees

JadeAH

Any help would be really appreciated. Basically I am looking into starting my own business using multiple sites online to sell. I have already started buying business items. I have recently came to a halt because the tax year is almost over and I'm trying to fill in the cashbook accurately (have only been buying for 1 month). Here are the questions related:

• I have sold personal items to raise capital for the business. Since these are going through my bank account, what do I record them as in the cashbook? Do I record them as capital introduced or just as sales/profit from start-up stock?
  
  I sought advice off Citizens Advice & they said they have to be declared as start up stock & I was to keep a list. However, they did not mention whether they were to be recorded as sales or capital introduced.
• Changing bank accounts, from in the red to green. How do I write this in the cashbooks? Do I need to keep records for both even though I will only be using the new one from when it is opened?

RFW

Get some help via a local business start up group. Your local council or local library will have details. In Manchester, for example, Central Library has weekly drop in days and workshops that are all free for start ups, so plenty of good advice you can get.

Also, if you've opened a business bank account, your bank will have free help for you too.

Brooker_Dave

An appointment with an accountant would be a good move.

soolin

I echo Dave's suggestion about an accountant, although it will cost you it might save you money in the long run, you can always ask for a fixed time fixed fee appointment.

HMRC also do business help, although I was a trained accountant I still found their help when I started up of great assistance. I particularly liked the fact that they advocated a very simple accounts style, and suggested I didn't over complicate things.

if you keep it simple then your initial sales to gain capital don't need to be shown. All that matters is that your books show business expenditure , it doesn't matter where that money came from unless there are costs associated with it like a loan.

Also, HMRC told me not to get bogged down in stock held, they suggested a simple income and expenditure log, which I still keep to this date. Unlike many business sellers I still keep all my books on paper, that's how I am comfortable doing it rather than using a PC programme.

I still consider myself a small seller and have never accounted for cash balances or reconciled income against a bank account (in fact as I use 2 PayPal accounts I have to use 2 bank accounts as well). However if I started to approach anywhere near the VAT registration limit then I would seek advice from an accountant and probably consider switching to online books.

Brooker_Dave

Some accountants will give a free first appointment, which will give you a clear indication of what records you need to keep and when you need to file your tax return.

JadeAH

Thanks all for taking the time to reply. Turns out I have an accountant in the family I was not aware of. Feeling pretty lucky. I'll take your advice and nit pick her brain on what I'm unsure about. And yes, keeping it as simple as possible. After all, I am starting small. So cash basis sounds alright for the moment.