Bookkeeping for Small Business in Ireland.pptx

Bookkeeping for Small
Business in Ireand
Sign up to webinars
https://accountantonline.ie/events/

Schedule of
webinar
We will provide advice, guidance, and support around these key areas:
Keeping records – what types of records you should keep, for how long, and what are the most
efficient and organised ways to store your documents
VAT – Revenue compliance requirements
Financial terminology – we’ll help you to understand key bookkeeping terms like bank reconciliation,
accounts payable and accounts receivable
Understanding financial data – the importance of having accurate data so you can make good
business decisions.

Bookkeeping
Basics
• Bookkeeping involves keeping track of your financial records, such as receipts,
expenses, invoices, and bank statements in your business.
• From a practical perspective it involves:
• Data entry
Reconciliations
Aged analysis & credit control
Reporting
• Good bookkeeping can help to grow your business. But what is good bookkeeping?

Bookkeeping Basics –
Common Pitfalls
• Not being up to date
• Mixing business & personal transactions
• Not taking advantage of technology
• Not knowing where to start
• Working hard not smart
https://accountantonline.ie/events /

Bookkeeping Basics -
Benefits
• Accurate financial information
• Up to date analysis of performance
• Assists with the production of annual accounts and tax returns
• Real time credit control
• Easier to plan
• Cash flow management
• Reliable and secure
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Bookkeeping vs Accounting
• Accounting is a bit more complicated than bookkeeping.
• Accountants may oversee your bookkeeping and make sure the records are maintained
correctly but they don’t usually carry out any data entry. Your accountant will prepare
technical accounting duties like preparing profit and loss accounts, balance sheets and
file your tax returns.

Types of documents needed for
bookkeeping
• Sales and purchase invoices/receipts
• Bank and Visa statements
• Payslips and wage sheets
• Stock / ecommerce / Point Of Sale (POS) reports
• Verification records for assets such as property, machinery or vehicles
• Cash books and receipts

Keeping Records
• In general, all books, records, and documents relevant to your business need to be kept
for six years.
• Businesses and individuals must keep a record of any paperwork used for calculating
taxes. This includes bank statements, invoices, and receipts received during the year,
• A complete business record should contain details explaining transactions, and having
the correct invoice/receipt for each transaction.

Sales Invoices
• 1. ‘Invoice’
• 2. A unique invoice number
• 3. Your company name and address
• 4. The company name and address of the customer
• 5. A description of the goods/services
• 6. The date of supply
• 7. The date of the invoice
• 8. The amount of the individual goods or services to be paid
• 9. The total amount payable
• 10. Payment terms
• 11. Purchase order number
• 12. How to pay the invoice

Bank
Accounts
• If you recently started a business in
Ireland the next step is to set up a bank
account. There are a lot of different
banking options so you should be well-
informed before you make the decision.
• Some banks have lots of experience
helping start-ups and offer no bank fees
for the first year in business. Saving
money on your bank fees can be very
important for new businesses.
• Q: How much do you charge in fees?
• Q: Do you have specialised support for Startups?
• Q: What is the application process like?
• Q: Are there any restrictions?
• Q: Do you offer direct debit mandates?
• Q: Do you have a banking app?

Bookkeeping Terminology
• Bank reconciliation
This is the process of comparing your sales and expenses against your bank account.
This ensures that the correct amounts are coming in and out. It’s used as a
verification check.
• Accounts payable
Any outstanding payments to your suppliers are categorised as your ‘accounts
payable’. If you have a supplier or vendor that you haven’t paid yet, they will need to
be organised and managed to ensure they are paid on time.
• Accounts receivable
This is the money that is owed to the business. This occurs when your business
provides goods or services, but payment is not due until a later stage. If you don’t
offer any goods or services on credit or you are a business to consumer (B2C)
business, you may not come across this term.

Automate Your Bookkeeping
• We recommend doing your bookkeeping online, which means moving away from
Excel, ledger books, Google Drive or Dropbox as a data management tool and using
cloud-based software that is specifically designed for managing small business
financials.
• Benefits of using an automated bookkeeping system:
Saves hours of admin time a week
Make better business decisions
Increase your cash flow visibility

Accounting
Software
• Xero
• Surf
• Sage
• Quickbooks

VAT - Basics
• VAT is a tax that is added on to the value of goods and services at every stage of
production or distribution. As a consumer, most of the goods or services that we
purchase have VAT included in the price.
• As a business owner, once you complete VAT registration in Ireland, you are obliged
to charge VAT on the products and services you sell. You also need to account for
VAT in your VAT returns and pay VAT liability to Revenue, usually ever two-months.

VAT -
Registrations
• You don't need to register for VAT straight after incorporation, except in certain
circumstances
• In general, as a new business, you don’t need to register for VAT from the moment
your business is set up. There are certain criteria your business must meet before
you start charging VAT on your goods/services.
• It’s important to note that both Sole Traders and Limited Companies are eligible to
register for VAT and you should consult with an expert about registering for VAT
before you do so.
• https://accountantonline.ie/events

VAT – Do I Need to Register?
• VAT registration is mandatory if you meet any of the following criteria:
• Selling over €37,500 for the sale of services or €75,000 for the sale of goods means
your company needs to register for VAT in Ireland. This is a sale threshold amount
over the course of 12 months (not calendar year)
• In receipt of goods from the other EU Member States over the value of €41,000,
also known as Intra-Community Acquisitions (ICA)
• In receipt of any services from outside of Ireland. If you receive services from
outside Ireland and the service is being used in Ireland, your business may need to
register for VAT.

VAT – Can I Choose to Register?
• You can choose to voluntary register for VAT
• You may choose to register for VAT if you deal with a lot of other businesses that
charge VAT. The downside to this is that you need to file bi-monthly VAT returns to
Revenue. This could be a considerable extra cost for a small business.
• Some businesses choose to register for VAT because:
• You can claim back the VAT you have paid on your purchase if you are VAT
registered and have business expenses
• You can add VAT onto your products or services from the beginning instead of
having to change your prices or add VAT later on

VAT – How Do I Register?
• To receive a VAT number in Ireland, you need to fill in a tax registration form and
submit it to Revenue. During the VAT registration process, Revenue will want to
see evidence that you have trade with Ireland.
• Revenue decides whether to accept or reject your application based on the
evidence you submit.
• If Revenue rejects your application, it doesn’t mean you will never get a VAT
number. You may need to spend some time gathering the relevant documents and
you can re-submit your application at a later stage.

VAT – How Do I Register?
• You need proof you require a VAT number
• The business has trading activity in Ireland
• You have invoices from Irish suppliers and customers
• The business owner/Director lives here
• You have a physical office in Ireland, a Virtual Office will not be accepted

VAT – Barriers to Registration
Reasons why Revenue might reject your application
• You’re not hiring employees in Ireland
• No customers in Ireland
• You are not trading with any suppliers in Ireland
• The Directors are not based in Ireland

VAT - Rates
• “VAT rates” refer to the percentage of VAT you will charge on your product or service.
• The most commonly used VAT rates in Ireland
• 23% is the standard rate of VAT. All goods and services that do not fall into the reduced rate categories are
charged at this rate.
• 13.5% is the reduced rate of VAT. This rate covers tourism-related activities including restaurants, hotels,
cinemas, and hairdressing. Building services and photography also fit into the bracket for this rate.
• 9% is a special rate for newspapers and sporting facilities. This also includes e-books and electronically
supplied newspapers.
• 4.8% is the livestock rate of VAT – specifically for agriculture. It applies to livestock (excluding chickens),
greyhounds, and the hire of horses.
• 0% (Zero) VAT on all exports, tea, coffee, milk, bread, books, children’s clothes and children’s shoes, oral
medicine for humans and animals. Please note, providers charge a 0% VAT rate and are entitled to claim
VAT on their purchases.
• Exempt: There is no VAT on certain financial, medical, or educational providers.

VAT – How to charge VAT
correctly
• Selling goods to private consumers (B2C) in Ireland :
VAT is usually charged on top of your usual sale price when you are selling to private
consumers in Ireland. Your customer pays the VAT over to you and you are responsible
for reporting and paying this VAT to Revenue.
• Selling goods to other businesses (B2B) in Ireland and other EU countries:
If you sell goods to other businesses in Ireland, you must charge VAT and account for it
in your VAT Return to Revenue. All the VAT you charge must be paid to Revenue in a
VAT Return – usually every two months (bi-monthly).

VAT – Place of Supply Rules
• VAT on services: place of supply
• When your business sells services, there are “place of supply” rules that apply. There
are two general “place of supply” rules depending on whether the recipient is a
business or a private consumer.
• For supplies of business to consumer services (B2C), the place of supply is (generally)
the place where the supplier is established.
• For supplies of business to business services (B2B), the place of supply is (generally)
the place where the business receiving the services is established.

VAT – What are VAT Returns?
• A VAT return outlines the invoices that you have charged VAT on and the invoices that you have claimed
VAT on for a given time period.
• When you are VAT registered, you must file your VAT3 returns by the 19th day of the month following the
end of each taxable period or by the 23rd day of the month if you file via ROS (Revenue Online Service).
• The taxable period is a two-month period (bi-monthly) that starts on the first day of January.
• For example, the return for VAT period 1 (1st January – 28th February) must be filed on the 19th of March
or by the 23rd of March if filed online using ROS.
• If you do not file your VAT returns or under-declare your VAT, you can incur fines and penalties.

VAT – What is Reverse Charge?
• The aim of the reverse charge is to have VAT applied in the Member State of
consumption (i.e. where the customer is based) rather than the Member State of the
supplier. It only applies to B2B transactions.
• The reverse charge means that the responsibility to report the VAT to the tax
authorities falls to the customer, and their domestic rate of VAT applies. The VAT is
reported in the customer’s local VAT return and does not appear in the supplier’s VAT
return.

Understanding Financial
Data
• The financial position of a business is crucial to all decisions that it makes. Using
financial information, a business should be able to identify what options it can
afford when making decisions. This financial data can be used to forecast how
decisions might affect the business’ cash flow and assess any impact on future
profits.

Understanding Financial Data
– What do I need to
have/know
• Some common financial reports:
Budgets
Income Statement/Profit and Loss A/C
Balance Sheet
Cash Flow
Debtors/Creditors

Financial Data – Why is it
important?
• Influences decisions
• Helps to assess company performance and health
• Aids compliance and reporting
• Can help to raise finance

Bookkeeping for Small Business in Ireland.pptx

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