Book-keeping and VAT

This guidance is based largely on the checklist on the subject produced by the Institute of Chartered Accountants of Scotland, whose assistance and permission is gratefully received.

Before undertaking even basic Book-keeping and VAT work, a CIMA Member in Practice is strongly recommended to set up a standard procedure and produce an adequate check-list. Even in this comparatively straight-forward area of activity, things can go wrong, and these activities should therefore be treated as carefully as more ambitious work.

Receipt of information from the client

You should ensure that the client agrees a strict timetable for providing the necessary information or material to you; there must be procedures in place to ensure that the required deadlines are met. Any breakdown in this routine is likely to have knock-on effects on your own work-plans, and could result in a late VAT return or similar problem, which in turn might provoke a fine. Your working papers must clearly show the source of the information you use, and be able to support figures in a VAT return.

Review of work

Where work is delegated to a junior member of staff, a suitably qualified person must take responsibility for reviewing that work. This review should also include, where computer packages are used, certification that all updates have been received and installed and implemented in the necessary timescale.

Reconciliations

Bank reconciliations must be carried out on a regular basis; you will have to decide, based on the volume and complexity of your work, what those regular intervals should be. Similarly you should carry out cash reconciliations on a regular basis.

Filing VAT returns

Before filing, confirm that the client (and NOT the practice) has signed the VAT return; ensure that copies of the relevant returns have been lodged on, or ahead of, time and that a copy has been placed on your files. Ensure that your file includes copies of correspondence, notes of telephone calls and notes of any meetings.

Creditors and Debtors

Establish who is to be responsible for paying creditors; where it is your firm, you must have procedures in place that will adequately ensure cheques are issued on time (and for the correct amount). Similarly, for debtors, you will need to establish who is responsible for debt collection. Again, if it is your practice, make sure that you have procedures in place adequately to ensure that this area is properly controlled.

Training

It is particularly important that you obtain appropriate updates on matters such as VAT before you undertake this sort of work. CIMA’s Code of Ethics requires you not to exceed your competence, and training is therefore essential. Provided that such training is relevant to your work, this activity will contribute to your annual CPD record.