1 Start Your Own Business Leitir Ceanainn, Co Dun na nGallTraining Programme An Ghlasaigh, Doirí Beaga, Leitir Ceanainn, Co Dun na nGall 1

2 Start Your Own Business Training ProgrammeModule 7 Bookkeeping and Records Management

3 Four 1 Day Workshops + Follow Up Clinic for Business Plan ReviewSchedule Four 1 Day Workshops + Follow Up Clinic for Business Plan Review Module 1 Introduction - Start Your Own Business and Personal Assessment Module 2 Ideas Generation and Researching the Market Module 3 Marketing the Small Business Module 4 Preparing a Business Plan Module 5 Legal Issues for Start Ups and Managing People Module 6 Sales Module 7 Bookkeeping and Records Management Module 8 Financial Management 3

4 Username: cleo15*@syob Password: CLEO15*@trDon’t forget – Lots of information on Course Website Username: Password:

5 Record Management and Book Keeping Statutory Deductions and Revenue Compliance "Annual income twenty pounds, annual expenditure nineteen [pounds] nineteen [shillings] and six [pence], result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.“ Charles Dickens, David Copperfield 5

6 You can control what you know You can’t control what you don’t know!There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we know we don't know. But there are also unknown unknowns. There are things we don't know we don't know. Donald Rumsfeld You can control what you know You can’t control what you don’t know!

7 Keep Full and Accurate Records from the StartAll purchases – make sure you get , keep and record invoices Don’t forget to get, keep and record fuel dockets All sales including cash sales All payments made out to suppliers All receipts in

8 Keep Full and Accurate Records from the StartFull wages calculations including deductions and employers statutory contributions All bank transactions – get a lodgements book Set up on line banking Check for charges Do monthly reconciliations Petty cash – make sure you keep and record dockets

9 Sales Invoice Listing Cash Receipts Book Purchase Day BookBookkeeping Sales Invoice Listing Cash Receipts Book Purchase Day Book Cheque Payments Book 9

10 Linking Records/Documents- These link or reconcile the basic books of entry to the final accounts e.g. Bank reconciliation, Stock Control List, Wages control account, VAT control account, Debtors control account, Creditors control account, Trial Balance. - Usually compiled by the accountant in preparing the final accounts 10

11 Linking Records/DocumentsTimely information Cash flow Management Monitoring Profit margins Monitoring credit given 11

12 “Cloud” options and packages available e.g. www.sortmybooks.comBookkeeping Options Types of Systems Manual – Hand written or Computer generated e.g. Excel, Word Accounts packages e.g. SAGE, Big Red Book “Cloud” options and packages available e.g. 12

13 N.B. The “wholly and exclusively “ rulePre Trading Expenses Expenses incurred in the 3 years prior to commencement of trade deductible on the first day of trade provided they are of a type which would have been deductible had the trade been carried on when they were incurred. N.B. The “wholly and exclusively “ rule 13

14 Supply of Goods: Turnover of €75,000.00 Registering for VAT Supply of Goods: Turnover of €75,000.00 Supply of Services: Turnover of €37,500.00 Distance Selling: Turnover of €35,000.00 14

15 N.B. The above thresholds to TURNOVER – not profitRegistering for VAT An accountable person established in the State is not required to register for VAT if their turnover does not reach the appropriate threshold above. However, they may elect to register for VAT. N.B. The above thresholds to TURNOVER – not profit 15

16 You charge your customers VAT at the appropriate rateWhat it means – in a nutshell! You charge your customers VAT at the appropriate rate You can reclaim VAT on business purchases Don’t forget the “wholly and exclusively” rule! It is possible to apply to pay VAT on monies received rather than on invoices issued – See 16

17 Current VAT Rates Rate Per cent What it applies to … Standard 23It is the “standard” rate Reduced rate 13.5 Includes certain fuels*, building services**, repair, cleaning and maintenance services generally, and certain photographic supplies 17

18 Current VAT Rates Rate Per cent What it applies to Second reduced rate9 This rate applies to restaurant and catering services; hotel and holiday accommodation; admissions to cinemas, theatres, certain musical performances, museums and art gallery exhibitions; fairgrounds or amusement park services; the use of sporting facilities; hairdressing services, printed matter such as brochures, maps, programmes, leaflets, catalogues and newspapers. 18

19 Current VAT Rates Rate Per cent What it applies to Zero Rates Zeroinclude exports, intra-Community supplies of goods to VAT-registered persons in other EU Member States, certain food and drink, oral medicine, certain books and booklets, certain animal feeding stuffs, certain fertilisers, seeds and plants used to produce food, clothing and footwear appropriate to children under 11 years of age and supplies to VAT-registered persons authorised by Revenue under the zero-rating scheme for qualifying businesses. 19

20 Current VAT Rates Rate Per cent What it applies to ExemptExempt goods and services consist principally of financial, medical* and educational activities as well as admissions to, and promotion of, certain live theatrical and musical performances. It is emphasised that persons who are exempt from charging VAT on their supplies are not entitled to receive taxable goods or services free of VAT and are not entitled to a credit or deduction for VAT borne on their purchases. 20

21 Full information at: Revenue Commissioners Website VAT specific information at:

22 For record keeping purchases:Always show the VAT as separate item on your invoices/credit notes e.g.: [From] [To] [Date] [Invoice Number] Invoice Wedding transport ………………………….. € per cent …………………………….€ Invoice Total: …………………………………… €615.00 Credit Terms: How/Where to pay: e.g. Bank transfer – Your account details VAT Registration Number:

23 Show the VAT in a different column e.g. in Sales LedgerIn your Books/Records Show the VAT in a different column e.g. in Sales Ledger Inv No. Date Client Details Total € Goods € 23% 1 1/1/2015 Wedding Transport 615.00 500.00 115.00

24 Issuing Invoices Name and address of issuer and recipient DateInvoices must be denominated in € Where goods services priced in another currency both currencies can be shown but Euro is predominant. Must be issued not later than the 15th day of the month immediately following the month in which the goods/services have been supplied Purchase Order number when appropriate 24

25 Issuing Invoices Name and address of Supplier and ClientDate Sequential numbering Invoices must be denominated in € (Where goods services priced in another currency both currencies can be shown but Euro is predominant) Must be issued not later than the 15th day of the month immediately following the month in which the goods/services have been supplied 25

26 Purchase Order Number (If Applicable) Issuing Invoices Credit Terms How to pay Purchase Order Number (If Applicable) Retention of Title Clause (If Applicable) Late Payment Penalties (If Applicable) 26

27 If a Limited Company you MUST also show on your letterheads/order formsplace of registration and registered number (as per - - certificate of incorporation), e.g. registered in Dublin, Ireland address of the registered office (where this is already shown on the document, the fact that it is the registered office must be indicated). in the case of a company exempt from the obligation to use the word "limited" or "teoranta" as part of its name, the fact that it is a limited company 27

28 If a Limited Company you MUST also show on your stationery/all correspondence/order formsin the case of a company which is being wound up, the fact that it is so if the share capital of a company is mentioned on letterheads or order forms of a company, the reference must be to the paid up share capital. These particulars apply only to business letters and order forms and do not need to be included on delivery notes or invoices. 28

29 Limited Company WebsitesEvery limited liability company which has a website is also required to display either on its homepage or to be identified on its homepage, a readily accessible webpage on which the following appear: the name and legal form of the company the place of registration of the company and the number with which it is registered the address of the registered office of the company in the case of a company exempt from the obligation to use the word "limited" or "teoranta" as part of its name, the fact that it is a limited company in the case of a company which is being wound up, the fact that it is being wound up if the share capital of a company is mentioned on the website, the reference must be to the paid-up share capital 29

30 For Information - Interest of Late PaymentsThe European Communities (Late Payment in Commercial Transactions) Regulations 2012 From the 1st January 2015, the late payment interest rate is 8.05% per annum (that is based on the ECB rate of 0.05% plus the margin of 8%). That rate equates to a daily rate of 0.022%. Penalty interest due for late payments should be calculated on a daily basis See for details 30

31 Record Keeping - EmployeesRegister with Revenue Commissioners Please see for comprehensive listing of records required 31

32 Payslip must show and the Employer Must record:Wages information Payslip must show and the Employer Must record: Gross Wages Overtime (if applicable) Itemised details of all deductions – which may include 32

33 Social Insurance (PRSI)/Universal Social Charge (USC) Deductions Deductions – you must record these ….  Tax (PAYE) Social Insurance (PRSI)/Universal Social Charge (USC) Deductions which are provided for in the contract of employment, for example occupational pension contributions. Deductions which are made with the employee’s written consent, for example, trade union subscriptions 33

34 Wages information – Employer’s PRSIDeductions may also  Deductions which are required by a court order, for example, an attachment of earnings order in a family law case Must offer facility for Local Property Tax deductions Deductions which may arise due to the employee being on strike Employers are entitled to recover an overpayment of wages or expenses KEEP FULL, ACCURATE AND CLEAR RECORDS IN ALL CASES! 34

35 PRSI Rates – current- Class A1 35

36 PRSI Rates – Self employed 36

37 Full details available on www.welfare.iePRSI Classes/Rates Full details available on 37

38 Six years - unless your Inspector of Taxes advises you otherwiseHow long do you need to keep the records for? Six years - unless your Inspector of Taxes advises you otherwise 38

39 Some businesses never recover!Don’t loose them… Keep records in secure place Keep copies – hard and or soft Keep copies off site Beware Data Protection/Security issues! Some businesses never recover! 39