So, I am busy completing accounts for a sole trader in the construction industry. The trader must present hard copy Construction Workers Guild statements (now used instead of the traditional voucher system)as these show guild margin (their profit and at £17 per week is nice work if you can get it), and is tax deductible: material invoices that the trader has expended (most subcontractors do not tend to spend on materials as this is normally left to the contractor and so is usually nil) insurance at £3 per week (also tax deductible) leaving total net paid per week.
These statements must then be reconciled, that is ticked off, item by item to the bank statements, which should be kept in sequential order. As an accountant, I am looking for any unidentified bankings, that means bankings which cannot be ticked backed to the bank statements and will also highlight what the missing Guild statements there are (not always kept sequentially as the trader may have been on holiday or sick) or any cash jobs that, of course, must be entered as turnover in the accounts.
I then must go through a box or file of purchase invoices sorting them first into categories and then dates as follows:
• Protective clothing: helmets, protective gloves, goggles, workmen suits, boots
• Small tools and tools repairs: normally under £50:00 and would be drill bits, spirit levels, assorted hand tools, measures
• Power tools: drills, assorted power saws, assorted power drills
• Assorted motor expenses splitting into diesel or petrol/motor insurance, repairs and road tax and loan finance charges
• Train tickets, cab fares
• From the bank statements, bank charges and bank interest
• Landline and mobile phone bills
• Assorted other expenses for which there are no specific categories
After completing all the above tasks I am only half way through the job: so who said it’s easy or should be cheap to produce a set of accounts?