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Hi David
The most common mistakes that are found by both Accountants and bookkeepers come under basic controls that should be done for all accounts Ltd and parts for self employed.
Remember Self employed business can also have balance sheets so they know their affairs how much they owe HMRC for payroll and Vat , Debtors and Creditors
A common mistake is for these controls not to kept for Self Asssement . Just because you are sole trader does not mean you do not employ people and are not registered for vat and have Debtors and Creditors. But what ever controls can be done should be done for both.
1) Opening balances not agreeing to the Balance Sheet summited to companies house or on the self assesment tax return .
2 Debtors Control Accounts not agreeing to the Aged Debtors Report , usually caused by year end Journals and not the individual customer been fixed.
3) Credtors Control account same as above but in reverse.
4) Accruals and prepayments not reversed either yearly or monthly depending on company policy
5) Bank Accounts not reconciled on the accounts solftware that is producing the P&L and Balance sheet ( I am meaning when a client says they have reconciled on Excel , this is of no use when it is not the software producing the accounts
6) Wrong Vat codes and incorrect purchases net figure for Vat Returns
7) Vat Return using Cash Accounting making sure the balance left after completing return = your Aged Debtors and Aged Creditors Vat element amount and the Vat element of any Bank Payments and Receipts made after that date.
Not Reconciling their Bank Accounts , Debtors Control and Creditors Control prior to doing the Vat Return. It makes future Vat returns Difficult.
8) Other Vat methods checking balances after completing Return
9) Not reconciling Gross Wages and Employers NI . PAYE & NI Control and Net Wages Control Account
10) Lots of Journals, Credits Notes is usually a sign of someone not knowing what they are doing are expecially loads of Credit Notes in a Cash Sales Customer account where cash is paid, not nessarily on the day can be a sign of theft .
10) computer Software usually indicates there is a Purchase Payment or Sales Receipt , if you see loads of payments on account this is an indication that the Debtors and Creditors are not been allocated correctly.
It is also a sign that invoices are miising on both sides , nobody pays out money for no reason or receives it.
The chances are Sales Invoices and Purchase Invoices are missing , therefore your Profit and Loss and Balance sheet would be incorrect.
Hope this helps . There are loads more but they are the main one I can think of just now. Incorrect coding of Turnover, Cost of Sales , Direct Expenses and Overheads is another one as others have mentioned
Edited at 12 Jan 2012 10:07 PM GMT
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