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Small business and not a separate bank

  • 11 posts
  • # 119933

Hello there,

Has anyone dealt with a small business that has expenses and a bank account that isnt strictly for the business so have to seperate things like broadband and income from the work from the rest of the outgoings and spouses income on the account? If I ask them to have a seperat account how then do I prove the things like broadband etc that come out of the joint account. 

  • Fellow PM.Dip
  • Practice Licence
  • 33 posts
  • # 119953

I would have a discussion with the client asking them to specify the % of personal use that joint costs like broadband incur, and ask them to confirm this in writing, perhaps by email.

If you are performing an actual bank reconciliation in software, then just allocate all the personal costs to drawings, and if you are on an hourly rate with them that the time taken to process all these personal transactions is actually costing them money. If on a set fee, then explain you will have to raise your set fee to reflect the increased time taken to account for all these additional transactions.

If you are not using software, and the volume of transactions is not too large, then you could ask the client to highlight all his business related expenditure, and perhaps collate this information on a spreadsheet, using someone like 123 for filing an MTD VAT Return, as this costs only £15 for the whole year.

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