Is keeping accounts really that hard?

[Nystagmite]

I'm not sure if there's a more appropriate forum for this. Please move if there is.

 

I, with the help of some friends, have just set up a small group. I asked if we were going to charge people (this would be for things like buying a printer, paper, ink, etc) and someone said that it would be too complicated to keep accounts.

 

But is it? Or am I being too naive and it's not just a case of having tables with incoming money, outgoing money and stating where the money has come from and where it's gone to?

[caro]

Keeping accounts can just be a case of showing income and expenditure, but what about things like receipts, tax, will anyone be making any money? Could it affect benefits? How much will people be charged and what for? Will you need invoices? Do you want it to have charitable status in which case there is a lengthy process. What about VAT?

 

Maybe HMRC website might be a starting place to check out the implications of charging? Will you be able to self assess or will your accounts need to be audited?

 

These things certainly need checking out before you do anything.

 

Link to HMRC. http://www.hmrc.gov.uk/charities-donors/

[stu007]

IMO even if it is a small group as you say and if you consider asking a fee so the group can purchase printer, paper, ink etc I would still make sure and account for all this.

 

You need to consider:

 

1. What if one of the small group has a falling out and start saying funds were miss used.

 

2. What if a member that paid a fee wanted to see where the monies were going.

 

3. Has the Group considered if they are having meetings of the Group in and individual Group Members house if they need additional insurance i.e. say one of the group went to use the toilet upstairs and fell down the stairs and decided to claim against that group member.

[Nystagmite]

Thanks.

[Seraphesfahan]

I'm not sure if there's a more appropriate forum for this. Please move if there is.

 

I, with the help of some friends, have just set up a small group. I asked if we were going to charge people (this would be for things like buying a printer, paper, ink, etc) and someone said that it would be too complicated to keep accounts.

 

But is it? Or am I being too naive and it's not just a case of having tables with incoming money, outgoing money and stating where the money has come from and where it's gone to?

 

That really depends on the business you pick... If you think about it, certain types of industries require different types of information for your bookkeeping. The team you've put together may be better off asking a local bookkeeper for help! He/she can teach you the basics of keeping records and probably organize something that allows you to do it yourself after a while.

 

Any problems with your bookkeeping can be resolved by a financial auditor, should it ever come up. Hopefully you know your partners enough and can keep track of the cash flow to avoid any mishaps.

 

It might be too complicated for amateurs who don't know how... But it is certainly doable with the right tools (in this case, right people)!!

[Nystagmite]

I should point out that we're not a business as such. It's a small music group.

[assisted blonde]

think you would be better getting a basic bookkeeper to do your accounts as it can all go horribly wrong

[Seraphesfahan]

I should point out that we're not a business as such. It's a small music group.

 

A small music group? You'd only need a basic bookkeeper as stated above for that, then. It'd be a good idea to have an easy format you can use that allows you to see how much money is going in and how much money is staying after expenses so you can have a clear picture of what your financial situation is like. Additionally, have a list close-by that details the pricing of anything you need for operating so you can allocate effectively (be sure to indicate which is more of a priority!).

 

After a year of this, it is also a good idea to find out just how much you averaged over the past 365 days! The longer you do this, the more and more of a trending pattern you can discover. Do you sell more during the month of May, or do you go into the negatives in the month of October? Things like this will help you generate a financial plan that allows you to prepare for unexpected dips and expenses and also allows you to discover what you can work on to improve.

[Conniff]

Simple account can be just as simple to keep.

 

If you buy a proper accounting record book, you are half way there. Record everything in and out and always in ink, never in pencil. If an error is made in an entry, don't obliterate the entry, but rule it through with a single line and do it again on the line below.

 

Use a duplicate receipt book for the petty cash and a duplicate receipt book for any sales/spending. Always get a receipt for spending even if it's just teabags.