It is quite common to invoice a customer with terms of “30 days or net monthly account”. Small customers will be expected to pay within 30 days, while large customers will be expected to pay at the end of the month following the month of the invoice, so an invoice sent in August 2017 would be settled by 30 September 2017. Large companies do it this way because they may receive several invoices from a supplier, and will want to settle all of them with a single payment when they do their computerised cheque run. It would therefore be a good idea for the supplier to have sent a statement at the start of August listing all outstanding invoices. Typically the cheque run would be about the 25th of September. If you give credit and have debts to collect, then you might like to have a discussion with us. Most accountants are also general business advisors as well.
Archives for September 2017
We have now added an Intranet which tells us what to do with various types of client record-keeping. We would like to use optical character recognition with everything, but when we cannot, we need to know what the next best option is, and this Intranet will remind us.
Possibly the author has written this Intranet just for himself. Well, even he is no superman on a Monday morning, and it helps to have a written reminder of how to proceed with unusual types of records.
Value Added Tax returns for the quarter ended 31 August 2017 are due to be submitted by 7 October 2017, and any payment which is due should be made electronically by the same date.
Small private companies with a year end of 31 December 2016 and into their second or later year of existence should submit their accounts to Companies House by 30 September 2017 in order to avoid a Late Filing Penalty.
When we are using an optical character recognition system, sometimes we get the feeling that epithets like “one-trick pony” or “fair weather friend” are appropriate. OCR is excellent when things are going well, but when things are not going well, there is some risk of being left in the lurch.
Suppose that the client has very heavily annotated the bank statements. OCR will be useless, even when we can scan each statement on our blink comparator and make direct amendments to what we see based upon the ability of human beings to compare patterns. In this circumstance, we do not want to fall off a cliff edge.
We have taken a lot of time to develop other systems. In the case of the bank statements, we would have to type it in, but we would do it by the column in the order numbers, dates and narratives. We have lots of devices to help out here, so although we will take a bit longer to do the job, it won’t be disproportionately or catastrophically longer. Technologists call this graceful degradation.
In fact, we would be very competitive with our non-OCR systems even if other accountants were using OCR and we were not. One big alternative to OCR is Narrative Prediction. After we have typed in a few narratives, we can get the computer to guess the rest, and then just overtype the ones that it gets wrong. Often this gets it all right first time, or with only a few amendments needed. With the narratives being typed in last, it is obvious how NP will work with standing orders, but with other transactions our software can do a statistical analysis and make a prediction. In practice, we use NP all the time, even when we could have used OCR.
The combination of OCR and NP definitely isn’t a one-trick pony. NP is relatively invulnerable to poor scannability and can do handwritten records, so it is only in processing numbers and dates that we can have problems. We only really need to process about one in ten dates of material items, and can interpolate for the rest. As for numbers, well accountants can expect to have to deal with them. We normally enter numbers in debit-positive convention, which is fast and minimises the number of keystrokes required.
It can happen sometimes that when you are an employer, you have not actually made any wage or salary payments for a PAYE month such as the month from 6 August to 5 September 2017. In that case you must submit electronically an Employer Payment Summary as a NIL return by 19 September. This is too easy to overlook.
If you engage a local accountant and business adviser or a payroll bureau to do your wages, then this will be taken care of. In our case we keep a diary and do a batch of payrolls at about the same time each month. Our payroll files are bright yellow like the P30BC booklet so we do not overlook them.
Construction Industry Scheme returns for the month from 6 August to 5 September 2017 should be submitted online by 19 September. This includes NIL returns.
It is only too easy to forget the need to submit a NIL return when no payments to subcontractors have been made. If you engage a local accountant to do your CIS returns, then this will be taken care of. In our case we keep a diary and do a batch of work at about the same time each month. We aim to be the Carlisle accountants that businesses will turn to for a range of advice and services.
We have now given some thought as to how we would tackle certain difficult jobs. Possibly the worst kind of job is a private bank account being used for the business. There are a huge number of small transactions, of which about one in ten are relevant to the business. What would we do?
To begin with, we scan in all the bank statements using optical character recognition. This reads in dates and numbers, but not narratives. We then start adding narrative to income items, but every expenditure item is just labelled with the letter X. After a month or so, we run the Narrative Prediction routine. This guesses all the remaining income narratives, with a fair chance of getting it all right first time since income tends to be repetitive. We then overtype the guesses that are wrong, which won’t take long.
All expenditure items will now be labelled with an X after Narrative Prediction. We look through the bank statements and start overtyping with obvious business expenses. For petrol, we just tap the F9 key to generate the narrative “Petrol”, and this is easy to change to “Diesel fuel” by typing Alt-F9. For telephone expenses, we use the F7 key, which is easy to change to generate “O2” or “Vodafone Ltd” or “Virgin Mobile” or whoever else is the provider of telephone services. For rarer expenses, we just type in the full narrative, and the autocomplete system will help out the second time. It is good policy to add narrative to large items and to standing orders, even if they turn out to be private, and we can add narrative to standing orders in bulk if we want to.
We think that this system is the best way to do it. The large number of transactions dictates the use of OCR, but we don’t want to have to start processing a large number of private narratives when we don’t have to.
The point about this type of job is that many of the transactions are computer-generated, as direct debits or standing orders or similar, and computers can churn them out in a way which a human cannot. If we just get a pile of invoices to type in, there tends to be just not that many invoices in the first place, because each invoice requires the action of a human being. Likewise, handwritten records are seldom more than 72 transactions or half a dozen per month. It’s the computer-generated stuff that we fear.
If your company had a deadline of 31 August 2017 for the submission of its accounts to Companies House, and this deadline has been missed, then you still have something to play for, and you should contact Carlisle accountants such as David Porthouse and Co at once. You will incur a penalty of £150, but this penalty rises to £375 after 30 September 2017 if you still haven’t submitted your accounts. These penalties are £300 and £750 if you miss the deadline two years’ running. We can readily prepare and submit your accounts within the month if you contact us now.