How to account for no sales records
A sole trader t/a mot garage / vehicle repairs has approached me to prepare the annual accounts and tax return. No records of sales have been recorded for the full year, other than debit/credit card payments paid into the bank and also cheques from customers paid in with a paying in book with no details (no cash paid in to the bank from customers).
The business deals with quite a lot of cash because staff wages are paid via cash and I would say 60 to 70% of purchases as well.
How would other practitioners / accountants / technicians or bookkeepers deal with this?
As no balance sheet is required and HMRC were not very helpful the only way I can think of to prepare a profit and loss would be to:-
Create a cash book from the bank statements.
List all the purchases and expenses from the invoices then match any that have been paid via the bank.
As the business has no credit terms with it's suppliers and pays on delivery (out of choice), the difference between what has been paid via the bank and the full value of the purchases should be the cash paid out, therefore the cash received as sales; excluding profit.
Add this cash sales amount to the identified sales in the bank receipts, then add any other known cash payments for instance wages, drawings etc again adding this to the sales.
The only thing missing (I think) would be the profit which would there be an average gross profit for this particular business that I can use?
Any opinions please, tell me if I am just completely wrong here.
- DAILY PENALTIES / APPEALS 173 1
- Ceasing in membership of ATT 365 4
- Recourse to Accountant for incorrect accounts 1,785 18
- Entrepreneurs Relief 580 27
- VAT Tax Point - Overseas Purchase 52 1
- SA -2012_13 return - worth changing? 160 3
- Seting up a Direct Debit for PAYE 100 1
- How to filter to show only rows with 'Total' in description? 187 4
- IHT dilemma 1,268 19
- Micro Entity Accounts 289 3
- Aweb tracking ... 222 3
- PAYE 1,311 16
- Self Assessment - Declaring Pension Lump Sum on Tax Return 109 1
- Gifts from limited companies 158 2
- Construction Industry Allowable expenses 361 8
- Are any of you agents for doctors? 348 2
- VAT 115 1
- RTI overpayments gap 243 3
- Can a once active Limited company become dormant? 228 5
- Sage payroll alternatives 564 11
- Auto enrolment excuses 1,126
- Feedback on accounts production software for IFRS 786
- Add T&Cs to Sales Order in Sage 472
- Digita Hosted Software 302
- Credit where credit's due....... 247
- Buying goods in US and selling them to company in US 217
- Director phone costs 202
- General rule: Evidence that the customer is in business 174
- Warning for freeagent accountants using payroll import 151
- Flat rate VAT- other income calculation 138