Book Keeping & a few other questions

[rodders]

Hi,

I'm setting myself up in April hopefully and had a few questions;

1. Anyone got any advice on good book keeping?

2. I have found sample quotations and invoices online, would these be ok to use?

3. Do you use a seperate business bank account or a seperate current account for your business?

4. How much tax would you put away in the first year of trading (taking into account massive expenses to start the business)?

5. I will be getting public liability insurance, would 1 million pound cover be enough to start off with? How much cover on tools would you say?

6. Anyone have professional indemnity insurance? Anyone needed it?

Thanks,

appreciate all the help.

 

[quality]

get an accountant - a good one that knows self employed folk

 

[dontknowitall]

Best of luck!! Hope it goes well for you!

1. Find an accountant and ask him/her. We all have different systems. Mate of mine has a carrier bag (and pays his accountant a fair whack.) I have a complicated spreadsheet, a cheap carbon invoice book (I use MS Word for when I want a posh invoice) and a lever arch file with all my receipts in the same order as my spreadsheet. Low accountant bill as a result as it's more of a checking exercise for them.

2. Fine - whatever's easiest for you and the way you want to reflect your business.

3. I have a separate bank account as I use a trading name. Free for first year (with some banks just free). Quite okay to use a personal account until the bank starts hassling you. In my opinion it looks more professional to have cheques made out to a business name, but not obligatory to have a business account.

4. 25% of net income should cover you. Don't expect to show profits for at least 18 months though. Another topic for the accountant.

5. Many of us have £2m public liability with others having £5m or £10m. If you want to be GasSafe I think £2m is the minimum. Obviously depends on the types of jobs you have. Got to cover a house as well as other things for the occupants such as loss of income, etc. Money for the insurance boys, in my opinion, but at least it gives you and your customers peace of mind.

6. Most of us don't have PI insurance, but again, it depends on the type of work you have. In my opinion this is easy money for an insurance company - too easy for them to wriggle out of a claim and trying to make them pay out will cost thousands in legal fees.

 

[WaterTight]

5. Many of us have £2m public liability with others having £5m or £10m. If you want to be GasSafe I think £2m is the minimum. Obviously depends on the types of jobs you have. Got to cover a house as well as other things for the occupants such as loss of income, etc. Money for the insurance boys, in my opinion, but at least it gives you and your customers peace of mind.

does anyone actually feel they have peace of mind due to being insured though? i just presume they'll wriggle out of it when it comes to a big claim. that's what they view their job as isnt it? find any reason to not pay out. and there'll always be something...

 

[dontknowitall]

When I work in an expensive house it's peace of mind for me. Surprising how many times I'm asked if I'm insured as well - always the same answer - "Yes, but I've never had to claim."

 

[thereisawizza]

Hi,

I'm setting myself up in April hopefully and had a few questions;

1. Anyone got any advice on good book keeping?

2. I have found sample quotations and invoices online, would these be ok to use?

3. Do you use a seperate business bank account or a seperate current account for your business?

4. How much tax would you put away in the first year of trading (taking into account massive expenses to start the business)?

5. I will be getting public liability insurance, would 1 million pound cover be enough to start off with? How much cover on tools would you say?

6. Anyone have professional indemnity insurance? Anyone needed it?

Thanks,

appreciate all the help.

You may need to look at 2 mil PLI, many companies require ths to work on any work premises.
Invoices can be quite basic as long as the essentials are there, you don't HAVE to show labour and materials, it's your choice.
Quotes I keep in the form of a letter, keep it short, sweet and don't forget your caveats!

 

[CES]

All of above plus:
Get a good set of Terms & Conditions drawn up indicating your payment terms, late payment interest, retention of title clause (when you supply goods, you own them until payment is in full, especially when dealing with businesses who may go bust after you're supplied goods, if you don't have this in your terms then legally you don't own the supplied goods as title can pass upon delivery and they can be sold by a liquidator to settle a higher level creditor even though you haven't been paid for them.).
It can be a pretty nasty place so you have to ensure you are covered, talk to an Accountant / Lawyer about these before you start up, it can save a lot of hassle afterwards when you may need them.

 

[cr0ft]

All just my opinions of course.

1. Do it yourself. How else can you keep on top of your business and know it inside out? Use Businesslink and any other source of information that will help you understand the tax laws in the UK. This will help you be more profitable and save £700+ a year on an accountant. As you get more busy you may want to consider one but I personally don't think it's necessary when starting up. Keep your outgoings low!
2. It depends on how much flexibility you want. You can use any system when you start up, but it's only once you get busy that any weaknesses in your current system will show through.
3. If you are starting up as a Ltd company you have to have a business bank account. If you are self-employed its optional but I would argue it makes it much easier to reconcile your bank account with your accounts program each month.
4. 20% of all the profit I make. If you are doing your book-keeping using an accounts package (either online/offline) you will know exactly how much to put aside. I would suggest a savings account for tax purposes so you don't end up with a nasty bill you can't pay at the year end.
5. More than enough unless you want to subcontract for any big firms. Many larger firms want £2m insurance. Councils usually want even more. How much cover on tools depends purely on what you are planning to buy in the first year to be honest.
6. No, although if I find I am doing a lot of electrical inspections I will get it at that stage. I'm not convinced it's worth it for plumbing. As long as you know what you are doing you should be fine.

Hope some of this helps.

 

[REDSAW]

no need for p.i. unless your designing or inspecting etc.

the idea is not to pay tax, if some is due then treat yourself to tools, training or new van etc.
when you go to work in a bently then get an accountant.