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Accounts for Sole Trader
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I am in the same boat aa PAYE and just startng out as a sole trader n the side. I would appericat it if you might send the template you refered to on. my e mail is [EMAIL="gpfoto@ymal.com"]gpfoto@ymal.com[/EMAIL] Many thnaks
The email I sent you came bouncing back so I changed it to 'ymail' and resent. If you haven't received it please pm me your correct email address.
In an update, it turns out my sparring partner Barneystinson actually works for the Revenue. He's had a copy of the template for a good few months now and I've heard nothing untowards back.
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Thanks for that Gloomtastic,
It's certainly a useful template. It would be most suitable for a small business. It will benefit your accountant to have this, as he can use it as a starting point. You've also given good advice re the splitting of Revenue streams.
There are a couple of flaws/improvements that could be made, imho.
Depreciation
In your example there's a cost of equipment of €500 in January ( I know this is only an example). If this were the full cost of the equipment it would be wrong to include here. For accounting purposes it should be* the estimated monthly charge for the use of the item.
Depreciation is important as it allows you to cost the inclusiveness of the asset, yet not overly burden an accounting period with its full cost when it will be used for more than one accounting period.
Depreciation could be calculated in a separate sheet and the total for Depreciation included in your monthly/annual accounts.
Depreciation will also need to be included in your adjusted profit calculation, by adding back. Capital allowances would then need to be deducted as per Revenue rules.
*Accountants, please forgive the use of language!
Overly relying on a template.
Not a problem for you I'd imagine, but others that use the sheet will need to modify for changes in the VAT rate.
I know it wasn't designed for other users, other than yourself, but it should be pointed out that the expense lines on the template are not exhaustive (I know this is going to come across as obvious!)
Extra column for Coding
It'd help end of year calculations if you added an extra column on your outgoings sheet, so that the expenses were identified as you went along i.e. enter telephone, advertising etc. At the end of the year you could simply use a sumif etc function to total up the various expenses. These then could be linked to what you call your cashflow sheet (it'd be best to call this an I&E or Income and Expenditure sheet - cashflow is entirely different and not related to profit)
Lack of Balance Sheet
This actually might be a fatal flaw in your template. The Revenue now expect to know what your bank balance is at the end of your accounting period, plus to know what your drawings are. The drawings figure will not be obvious from your workings. And as such would subject the user to a greater risk of audit.
In summary,
A useful template, but I'd have to come up short in actually recommending its use without the input of an accountant (neither does gloomtastic as far as I can see). Now, it could be levelled at me that I would say that, seeing as I'm an accounting moderator.
However, I've not worked in practice in over 10 years and would have no benefit for advising such.
So, useful, but not perfect 0 -
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Thanks for that Gloomtastic,
It's certainly a useful template. It would be most suitable for a small business. It will benefit your accountant to have this, as he can use it as a starting point. You've also given good advice re the splitting of Revenue streams.
There are a couple of flaws/improvements that could be made, imho.
Depreciation
In your example there's a cost of equipment of €500 in January ( I know this is only an example). If this were the full cost of the equipment it would be wrong to include here. For accounting purposes it should be* the estimated monthly charge for the use of the item.
Depreciation is important as it allows you to cost the inclusiveness of the asset, yet not overly burden an accounting period with its full cost when it will be used for more than one accounting period.
Depreciation could be calculated in a separate sheet and the total for Depreciation included in your monthly/annual accounts.
Depreciation will also need to be included in your adjusted profit calculation, by adding back. Capital allowances would then need to be deducted as per Revenue rules.
*Accountants, please forgive the use of language!
Overly relying on a template.
Not a problem for you I'd imagine, but others that use the sheet will need to modify for changes in the VAT rate.
I know it wasn't designed for other users, other than yourself, but it should be pointed out that the expense lines on the template are not exhaustive (I know this is going to come across as obvious!)
Extra column for Coding
It'd help end of year calculations if you added an extra column on your outgoings sheet, so that the expenses were identified as you went along i.e. enter telephone, advertising etc. At the end of the year you could simply use a sumif etc function to total up the various expenses. These then could be linked to what you call your cashflow sheet (it'd be best to call this an I&E or Income and Expenditure sheet - cashflow is entirely different and not related to profit)
Lack of Balance Sheet
This actually might be a fatal flaw in your template. The Revenue now expect to know what your bank balance is at the end of your accounting period, plus to know what your drawings are. The drawings figure will not be obvious from your workings. And as such would subject the user to a greater risk of audit.
In summary,
A useful template, but I'd have to come up short in actually recommending its use without the input of an accountant (neither does gloomtastic as far as I can see). Now, it could be levelled at me that I would say that, seeing as I'm an accounting moderator.
However, I've not worked in practice in over 10 years and would have no benefit for advising such.
So, useful, but not perfect
Thanks for the feedback.
It is a small business template but I have used it in larger businesses (€2m+) for monthly management accounts.
Good point re Coding. I currenty use the Sort function to identify all the outgoings for the year end but I'll check out the sumif function.
I did include a balance originally, at the bottom of each month, but after a year or so got rid of it because it bore no resemblance to reality - I use my sole trader account to treat my family to a meal out every now and then when business is good. I might stick it back in for others sake.
I stopped using an accountant a couple of years ago when business dropped significantly and I couldn't justify, or afford, spending €500+ on year end tax returns. Discovering you could do it yourself online in 20 minutes was indeed a revelation! It will take a lot of reassurance to ever use one again in future I'm afraid.
If it makes the accounting profession feel better about itself, I stopped using lawyers many, many years ago and do all that side myself as well!
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