Personal Annual Return

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Personal Annual Return:

1. Personal Annual Return (PAR) includes all legal obligations to keep adequate financial records and make quarterly and annual returns to HMRC and Companies House.

2. Management Account Service (MAS) is an additional set of internal company accounting information that extends beyond just the legal obligations with calendar monthly reporting.

3. Mission:

By recording each financial transaction in the diary as it happens, all monthly, quarterly and annual returns can be automatically generated without any further processing.

4. Every transaction has two parts as the net amount and the VAT code that implies a percentage of the net amount. For reporting purposes, gross amounts may be shown to match bank account transactions.

5. At the simple level, project costs are accumulated by (1) Labour, (2) Hire and (3) Purchase.

Transaction Types:

1. Every account transaction is a type of task as "Account" (250) where the subtype is defined as:

Task Design:

The number of different types of task has increased to the point where a two-level classification is mandated and known as (1) Type and (2) Subtype.

Task types and subtypes include:

210. Asset (project) with subtypes as:

(11) Asset Supplies Delivery.

(12) Asset Supplies/Waste Collection.

(21) Asset Hire Delivery Contract Hire Equipment.

(22) Asset Off-Hire Contract Hire Equipment.

(23) Asset Hire Collection Contract Hire Equipment.

(31) Asset Inspect LOLER.

(32) Asset Inspect PUWER.

(33) Asset Inspect FIRER.

(34) Asset Inspect PAT.

(34) Asset Inspection.

220. Contract (project) with subtypes as:

(11) Contract Labour Plan for quote and RAMS.

(12) Contract Asset Plan for quote and RAMS.

(13) Contract Supplies Plan for quote.

(14) Contract RAMS for contract.

(15) Contract Quotation for contract.

(21) Contract Delay to work.

(22) Contract Change (more or less) to contracted work.

(23) Contract Non-Conformance and Snagging List.

(24) Contract CAR as Corrective Action Plan.

(25) Contract QA as Work Package with many work items.

230. Document (IP) with subtypes as:

(11) Doc Note.

(12) Doc Minutes of Meeting with many minutes.

(13) Doc Email Message and RFI.

(21) Doc Reminder as scheduled alarm or email message.

(22) Doc Upload as photographic or documented evidence.

(23) Doc Template as Standard Letter or Document.

(31) Doc TO DO List at personal or project or company level.

(32) Doc Shopping List at personal or project or company level.

(33) Doc Chat Area for intra-project instant communications.

240. Activity (project only) with subtypes as:

(11) Activity DAB as Daily Activity Briefing.

(12) Activity Upload (file or picture) Evidence.

(21) Activity Cut and Chase with dust, working at height, debris, etc..

(22) Activity Drill Downwards.

(23) Activity Drill Upwards.

(24) Activity Drill Horizontal.

250. Account (by personal, project or company) with subtypes as:

(11) Account Labour where time worked is billed with optional time sheet.

(12) Account Expense where consumables (travel, subsistence, phone) are purchased on behalf of the company.

(13) Account Hire (Contract Hire) where a project requests assets to be hired from a supplier.

(14) Account Supplies where supplies (cost-of-sale) are purchased on behalf of the company.

(21) Account Invoice where one or more labour, expenses, hire and supplies are invoiced.

(22) Account Payment where one or more expense invoices are due or is paid.

(31) Account VAT Accrual where VAT is derived from payments and revenue.

(32) Account CIS Accrual where CIS is derived from payments for labour.

260. Personal (by Person) with subtypes as:

(11) Person Register as Daily Register as time sheets.

(12) Person Checklist as Daily Pre-Start Checklist.

(13) Person HAV as Hand and Arm Vibration.

(21) Person Leave.

(22) Person Holiday.

(23) Person Sickness.

(24) Person Training.

2. This design feels easy to comprehend in a world with the 8 seconds attention span of a goldfish.

3. Project costs paid directly by the client are not part of the project (contract) account, but may be added as a project note.

4. The project client who pays the company may be a contractor with their own client.

4. The company earns revenue from clients by projects as account receivables. The company pays suppliers, including subcontractors as its account payables.

Replication:

1. Some account transactions are replicated views in that they serve more than one purpose. A Project Invoice is a Client Invoice. A Project Payment is a Client Payment and visa versa. A Client Labour is a Project Labout cost. A Client Hire is a Project Hire cost. A Client supplies Purchase is a Project Purchase cost.

2. Where a client pays directly for Labour, Hire or Supplies, then a task will record the cost so the actual cost of the project is shared information. A client who is a contractor may provide their own labour and may purchase their own supplies - this must be recorded with at least an estimate of the costs involved as part of the project.

3. Each persons time sheet may be both Personal Labour and Project Labour, but with different rates.

4. Each persons expense account may contain transactions that become Project Purchases.

5a. Time Sheet represents labour costs for the person, company, project and client.

5b. Hire Sheet represents hire costs for the company, project and client.

5c. Purchase Sheet represents supplier costs for the company, project and client.

6. Project (financial) Plan (including RAMS) is expanded to record hire costs for all assets used by project - asset list must include all equipment hired with schedule. Project Plan is expanded to record supplier costs for all purchases for project - delivery schedule is part of project plan.

VAT Accrual:

1. The VAT accrual task shows monthly account management information where VAT is just one factor. Costs are collated by calendar month with no regard to when they may be invoiced or paid. Revenue is collated to be selected by invoice or by payment.

2. VAT is accrued from sales revenue payments and supplier purchased payments as "cash accounting". Management information shows VAT potential liability based on invoices that may or may not have been paid. VAT is managed for the Owner and for each person with a VAT registration. VAT is not managed for projects, clients or suppliers.

3. A VAT task is created for each quarter as the sum of each calendar month account summary. On the first day of each month, all revenue, purchases and expenses for the prior month are consolidated for management information only.

4. This is a dynamic report because it is assumed that not all relevant transactions will be complete and correct on the first of the month.

5. VAT accrual has been automated for the Owner and for each person who has a VAT registration. The diary shows the root task for VAT accrual for each calender month and each quarter.

6. Task "Account VAT Accrual" is show for the 1st day of every calendar month - like an anniversary. Click on this task and it will show all applicable accounting invoice or payment transactions, together with the accumulated total accrual. The VAT accrual task states include:

(1). Quarter payment cash accounting report to HMRC.

(2). Month payment cash accounting report.

(3). Month invoiced liability report.

(4). TO DO: cash flow forecast into the future based on history.

How does it work

VAT Accrual is a pseudo task shown when the date is 1st for each relevant person and the Owner diary - click the button to create the VAT Accrual task and view the details as a browse of the actual relevant tasks in the diary for the calendar month. Person must have a VAT registration.

CIS Accrual:

1. CIS is accrued from labour payments for each persons diary and the Owner diary. CIS is not managed for projects, clients or suppliers.

2. A CIS task is created for the 14th day of every calendar month - even when CIS accrual is zero.

3. The CIS task report shows all labour payments made and CIS deductions for the prior calendar month. It is assumed that the CIS return to HMRC will be made between the 14th and 16th of every month.

5. Task "Account CIS Accrual" is show for the 14th day of every calendar month - like an anniversary. Click on this task and it will show all applicable persons invoices or payment transactions. The CIS accrual task states include:

(1). Month payment cash accounting report.

(2). Month invoiced liability report.

How does it work

CIS Accrual is a pseudo task shown when the date is 14th for each person and the Owner diary - click the button to create the CIS Accrual task and view the details as a browse of the actual relevant tasks in the diary for the calendar month. Person must have a CIS registration.

Time Management:

1. Manually, an Account Labour transaction can be added to each personal diary and project diary for each person each day, or it can be implied. With 20 people working on a project, 20 labour tasks would be added at the project level and each persons diary would also need a labout task - total of 40 tasks to be added with no increase in knowledge.

2. Any time sheet can become a pseudo account labour transacion at both the personal and project level. Simply include the invoice number into the time sheet for it to become billed at the personal and/or project level. Time sheet has project invoice number and personal invoice number fields.

3. When the time sheet is viewed at the project level, the project rate for the persons skill is used to derive the cost. When the time sheet is viewed at the personal level, the personal rate us used to derive the cost.

4. Every project quotation and plan includes rates for different labour skills. Site Manager, Site Supervisor, Trade, Operative are typical skills with rates.

5. Where the time sheet and standard rates are not applicable, then an Account Labour task can be added with any applicable rates. Not all projects invoice for actual labour costs based on time sheets. People (contractors) invoice for their actual labour costs based on their time sheets.

Costs Accumulate Down:

#	who	Labour	Exp + Hire	Purchase	Invoice	Payment
1	Person	Labour Time Sheet	Expense Sheet	Purchase Sheet	Invoice	Payment
2	Supplier	Labour (above)	Hire Sheet	Purchase Sheet	Invoice	Payment
3	Project	Labour (above)	Hire (above)	Supplies (above)	.invoice	.payment
4	Client	.labour	.hire	.purchase	Invoice = labour + hire + supplies	Payment

Project Plan:

1. Every project is conducted according to its project plan, even where the project plan is not documented.

2. Every project is a contract between a client and a contactor where the contract begins life as a quotation.

3. When the client changes the contract, the old project stops and a new project begins in accordance with the new contract, but that does not change work done under the old contract.

4. The project plan is shared information that includes:

(1) Time Sheets of labour costs with HAV and DPSC.

(2) Hire Sheets of contract hire asset costs with inspections.

(3) Purchase Sheets of purchased supply costs.

(4) Invoice as sum of labour, hire and supply costs.

(5) Payment of one or more invoices.

(6) Balance Sheet of project income and outgoing.

(7) RAMS for project including list of assets and sequence of activities as milestones.

(8) Activity Plan and schedule of labour.

(9) Hire Plan and schedule of hired asset deliveries and collections.

(10) Supply Plan and schedule of purchased supply deliveries and waste collections.

(11) ASRA Activity Specific Risk Assessments for scheduled activities.

(12) DAB Daily Activity Briefing with delivery and collection schedule.

(13) DPSC Daily Pre-Start Checklist with each time sheet.

(14) HAV Hand and Arm Vibration record with each time sheet.

(15) Inspection LOLER and PUWER and FIRER task reports with each hire sheet.

Picture:

.	Contractor (sbx)	Project (contract)	Client (eds)
(L) Labour	TS * rate1 = cost	TS * rate2 + x% = cost	.as project
(H) Hire	days * rate3 = cost	days * rate4 + x% = cost	.as project
(S) Supplies	supply - discount = cost	supply + 12% = cost	.as project
(I) Invoice	supplier invoice for L, H or S	.as client	client invoice = L + H + S
(P) Payment	supplier paid	.as client	client pays contractor

"TS" means time sheet hours.

"rate1" is the subcontractors hourly rate to the contractor.

"rate2" is the contractors hourly rate to the project and client. A labour cost plus percentage may be added.

"rate3" is the contract hire rate to the contractor.

"rate4" is the contract hire rate to the project and client. A hire cost plus percentage may be added.

A supplies cost plus percentage may be added.

"L + H + S" means cost of labour plus hire plus supplies.

When the Site Manager controls all project financial transactions, then the clients account and the project account are the same.

Subcontractor Example:

Project name is SS. Client name is ED. Supplier name is SX. Subcontractor name is SB.

1. SB Personal Labour is recorded for 2 days at 8 hours per day at 20 pounds per hour as 320 pounds.

2. SB Personal Hire is recorded as wet vac for 1 day at 22 pounds.

3. SB Personal Purchase is recorded as wood screws 12 pounds.

4. SB Personal Invoice to SX for labour and hire and purchase as 354 pounds net plus VAT at the standard rate.

5. SX Supplier Payment to SB Subcontractor as 354 pounds net plus VAT at the standard rate.

1. SB Personal Labour is also recorded as SS Project Labour at 22 pounds per hour as 352 pounds - time sheet is shared.

2. SB Personal Hire is also recorded as SS Project Hire cost plus 12% at 25 pounds - asset hire evidence is shared.

3. SB Personal Purchase is also recorded as SS Project Purchase cost plus 12% at 14 pounds - asset supplies is shared.

4. ED Client Invoice from SX for labour and hire and purchase as 391 pounds net plus VAT at the standard rate.

5. ED Client Payment to SX Supplier as 391 pounds net plus VAT at the standard rate.

When a labour cost (time sheet) is recorded, it may need to be recorded as both a personal and project cost with different rates.

When a hire cost is recorded, it may need to be recorded as both a personal and project cost with different rates and cost-plus percentage.

When a supplies cost is recorded, it may need to be recorded as both a personal and project cost with a cost plus percentage.

When assets are a liability:

1. Tools that are used on a regular basis are an asset that must be paid for by the project as a "cost-of-sale".

2. Tools that are acquired by the company for long term use are "plant" that is written off at 25% per year for 4 years - annual accounts must record the asset valuation and depreciation cost. Accounts can only pay for 25% of the cost of such plant in the first year, however the company has to pay the whole 100% of the cost. In general, the acquiring of plant as long term assets is something the company cannot cost justify.

3. Assets in the accounts must be insured and stored in a safe location - this is additional costs that the company cannot pass on to a client. The Directors are loosing dividends by paying for assets that cannot be fully paid by the company in one year.

4. Tools owned by the Directors can be hired to the company and to projects at commerical rates as an when needed. Such tools are not owned by the company and are not fixed assets to be writen off over 4 or 5 years.

5. A company with valuable fixed assets shown in its annual account is worth suing, but a company with no fixed assets is not worth suing. Assets owned by the company can become an insurance and storeage liability.

6. Assets owned by a subcontractor can be hired to a project for a commercial daily rate that is paid to the subcontractor. The company gets the benefit of having assets available when needed, but has no liabilities. The subcontractor get paid when the assets are used and must carry the liability of lost and damaged assets.

Proposition:

1. The majority of construction companies loose money and eventually go bankcrupt due to cash flow problems, because the Directors focus on construction and not on the accounts. In 2017, the annual report of every tier-1 construction company showed a financial loss.

2. Watch what the majority of construction companies do and then do not follow such bad examples - do something very different.

3. The number one problem in the construction industry is poor cash flow management - taking on cash flow liabilities where the company cannot sustain the payments made to contractors before the client pays their bills. Within every quotation must be a very clear cash flow forcast to prove what the company has to pay out before it gets paid by the client - and that information must be shared with the client so the client knows when the project will stop if any payment is delayed.

4. Any quotation that includes 28 day terms of payment MUST include a 5% extra financing loan to cover the cost of borrowing the money for 28 days - and that must be shared to the client who may be motivated to reduce such a loan cost by early and advance payments.

5. The start of a project is a movable date with unbillable days caused by client uncertainty. The start of any project must be signaled by a 40% upfront client payment to hire labour, buy supplies and cost justify taking people off other project work. If the client cannot afford 40% at the start of a project, then they may not be able to pay 100% at the end of the project - more than 15% of clients fail to pay for their project.

6. When a contractor bids 100,000 to do a turnkey job, chaos may occur when that gross amount is not formally accounted for in terms of manpower, contract hire and supplies with overheads and consumables. By being open and transparent with the client and sharing all cost forcasts, the the client is involved to help manage cash flow problems.

7. Directors are employees with a fixed month salary of 1000 pounds so a simple payroll is done each month. A quarterly dividend may be paid by the company to its Directors. Directors may also have 1000 pounds per month paid into their private pension scheme by the company without any tax or NI liabilities - a long term saving scheme worth more than 15,000 per year to each Director. A private pension scheme running for ten years will have a value to buy an annuity to pay up to 15,000 per year for the rest of your life.

8. Directors bill their time to the company in the same way as any contractor - Directors are also self employed and responsible for their own annual tax return.

Client Billing:

1. The single most important task is to record every client billing job and to ensure that every job is invoiced and paid.

2. On the day that work is done for a client, details of that job must be recorded in the diary as a "client invoiced job" - the task desciption becomes an invoiced line.

3. Periodically, a client invoice is generated and referenced by invoice number to one or more client invoiced jobs.

VAT Return:

1. VAT return is paid quarterly as the sum of three months management reports. Revenue amounts are known as sales amounts in a VAT return.

2. Monthly management accounts accumulate and show four amounts as:

(1) Sales NET and VAT amounts.

(1) Purchase NET and VAT amounts.

2. VAT financial accounts accumulate and show nine amounts as:

(1) Sales VAT amount from UK.

(2) Sales VAT amount from EU as zero.

(3) Total Sales VAT amount as 1 + 2 above.

(4) Purchase VAT amount.

(5) Balance Sales minus Purchase VAT as 3 - 4 abovr.

(6) Sales NET amount from UK.

(7) Purchase NET amount from UK.

(8) Sales NET amount from EU as zero.

(9) Purchase NET amount from EU as zero.

Annual Return:

1. Annual return will show corporation tax liabilities as the sum of twelve months management reports.

2. Monthly management accounts accumulate and show:

(1) Revenue NET and VAT amounts.

(1) Expendature NET and VAT amounts.

What is a site?

1. A set of accounts and diary are managed for each CRM record representing:

(1) Project with a defined client and contractor.

(2) Client of one or more projects.

(3) Contractor of one or more projects.

(4) Supplier to contractor and projects.

(5) Person representing a client or contractor or supplier.

2. Privacy is deployed by granting approved people the right to see some of the above information. Every person is granted the right to processing their own personal diary and account information.

3. An approved person representing a client is granted the right to process that clients information but will not be aware that any other client exists. A client person may also be granted the right to process some project information that are owned by the client.

4. An approved person representing a supplier is granted the right to process that supplier information but will not be aware that any other supplier exists.

5. An approved person representing a contractor may be granted the right to process that contractors information but will nor be aware that any other contractor exists. A contractor person may also be granted the right to process some project information that are owned by the contractor.

Pseudonymised Names:

1. Privacy-by-design is built in with names encrypted and replaced with a token in all records, other than the primary CRM record.

2. The names of people, companies and projects must be selected from a list because names must be protected and the integrity of name spelling cannot be guaranteed when names are entered as text.

Person Diary:

1. Purchase: non-billable purchase (internet, mobile, admin) = outgoing.

2. Expense: non-billable expense (travel, consumables, food+drink) = outgoing.

3. Invoiced Expense: for client line of billable expense (travel, consumables, food+drink) = outgoing.

4. Invoiced Job: for client line of billable time.

5. Sales Invoice: to client as one or more invoiced jobs and invoiced expenses.

6. Sales Payment: from client for one or more sales invoices = revenue.

Personal Diary:

1. Purchase: non-billable purchase : bank transfer, direct debit, standing order.

2. Expense: non-billable expense : paid to person weekly or monthly.

3. Supplier Invoice: from supplier for purchased hire or supplies.

4. Supplier Payment: to supplier for one supplier invoice.

5. Invoiced Job: for client invoice line of billable time.

6. Invoiced Expense: for client invoice line of billable expense (supplies, travel, consumables, food+drink) = outgoing.

7. Sales Invoice: to client as one or more invoiced jobs and invoiced expenses.

8. Sales Payment: from client for one or more sales invoices = revenue.

Project Diary:

1. Time sheet: for client as billable time cost.

2. Supplies: for client as billable supplies cost.

3. Hire: for client as billable hire costs.

4. Project Costs: to client as many time sheet costs, supply costs and hire costs.

5. Project Income: from client for one or more project phases.

Note a person time rate includes the cost of consumables and approved expenses.

Note supplies are cost plus 12% to cover overheads like administration and the loan on money.

Note contract hire is cost plus 12% to cover overheads like administration and the loan on money.

Task Finance:

1. Purchase of recuring service for person.

2. Expense of cost for person.

3. Invoiced-Expense by person or company to be invoiced and paid by a company.

4. Invoiced-Job by person or company as time sheet to be invoiced and paid by a company.

5. Sales-Invoice as one or more invoiced jobs and invoiced expenses to be paid by a company.

6. Sales-Payment may be a company for one or more sales invoices.

7. Supplier-Invoice from supplier to company for purchased hire or supplies.

8. Supplier-Payment to supplier by company for one supplier invoice.

9. Project-Costs as one or more costs of time sheet manpower, supplies and contract hire.

10. Project-Income by client to company for project phase.

Views:

1. Data is heirarhical from Person to Project and from Project to Personal.

2. A persons time sheet data is viewed by a project and that project labour cost may be billed to a client.

3. Each person has a work place as a project. "Marketing" is a project for an owner to assign unproductive time and expenses that cannot be billed to a specific project.

4. When a person clocks in they select a primary work place as a project for that day and work done will be recorded in that project diary.

5. A person may select other project diaries, but time is normally assigned to one project for any day.

6. Time Sheet for a person records billable hours for a selected project for a certain date. Date + Person + Project = Hours.

7. Persons diary shows that persons time sheet, hours, rate, cost and expenses to be invoiced to their client.

8. Project diary shows many time sheets (labour) for the people clocked in to that project. This is the daily register that may create a time sheet for those that have not clocked in.

9. Project diary shows contract hire equipment delivery, off-hire and collection dates with rates and costs.

10. Project diary shows purchased supplies ordered and delivered with costs.

11. Project diary shows client invoice as accumulation of project labour, hire and supplies.

12. Owner diary replicates selected tasks from a persons and project diaries that is applicable to the owner. It is likely that no tasks need to be added to the owner diary because a view of all project data may be adequate.

13. Client diary replicates selected tasks from a persons and project diaries that is applicable to the client. It is expected that no tasks need to be added to a client diary because a view of relevant project account data may be adequate.

14. Supplier diary replicates selected tasks from a persons and project diaries that is applicable to the supplier. It is expected that no tasks need to be added to a supplier diary because a view of relevant project hire and supplies data may be adequate.

My personal diary and accounts:

1. Day by day, account tasks are added to my dairy to include:

(1). Labour as billable timesheet hours or the cost of doing a job.

(2). Expenses and allowances with a cost code justification.

(3). Hire cost of sale charges to do the job, including regular monthly service fees

(4). Supplies cost of sale charges to do the job.

2. Periodically (weekly or monthly), the any of the above costs may added to an invoice to be billed to my employer. All outstanding costs are listed and simple add the invoice number into those costs that are to become invoice lines. Costs not billed to my employer are simply marked with an invoice number of 1111 to indicate they are paid by me.

3. Periodically payments will be made into my bank account and will be added to my diary to match one or more invoices as paid.

4. An objective is to fully automate VAT and CIS accounting so HMRC reporting is the only manual action needed. CIS has a task created for the 14th day of every month when CIS (for the prior calendar month) is reported to HMRC. VAT has a task created for the 1st day of certain quarters when VAT (for the prior three calendar months) is reported to HMRC.

5. Expences, hire and supplies are added as account tasks that may include or exclude VAT accrual, depending on the persons profile. A person without a VAT account can simply enter gross amounts as and VAT is not accounted for. A person with a VAT account must enter a VAT code for every charge as:

(1). Amount No VAT where the amount does not have VAT such as an allowance.

(2). Gross with VAT where the gross amount including VAT is entered.

(3). Net without VAT where the net amount before VAT is added is entered.

6. POLICY: my accounts are dominated by cost of sale charges that are wholly and necessarilly needed to do the job. My administrative charges are trivial and in compliance with HMRC regulations and advice.

Report:

1. A pseudo Management Account task is created for the 1st day of each month to show management accounts for the prior calendar month. Please do not confuse my personal accounts with my company accounts - they are legally different things.

2. Every row includes: Date, Description, Cost-Code, Net, Vat, Gross.

3. Revenue: either (1) forcast as invoiced or (2) actual as payments. Each invoice or payment task with total of all revenue in month.

4. Purchases: Total of expenses brought foreward from below. Line for each hire task as cost of sale. Line for each supplies task as cost of sale. Total line for all purchases in calendar month.

5. Balance: as total revenue minus total purchases Quarter to date (VAT return), brought foreward and carried foreward. Year to date (annual return), brought foreward and carried foreward.

6. Expenses: (admin) Line for each expense task with cost code. Total line for all expenses in calendar month.

7. Cost Code Analysis: (admin) Line for each cost code with sum of expense costs. Total line for all cost codes in calendar month.

8. CIS Accrual: (optional) Line for each labour task that has been paid. Total of all paid labour. Total CIS paid directly to HMRC. Year to date (annual return), CIS brought foreward and carried foreward.

My Cost Codes:

1. A simplified set of cost codes has been adopted as:

(1). Revenue as invoices paid by BACS.

(2). Hire "cost of sale" services as supplier invoiced amounts (with VAT) such as monthly internet fees.

(3). Supplies "cost of sale" for goods by supplier invoiced amounts (with VAT) such as tools.

(4). Bank, accountancy, insurance and general administrative expense.

(5). Phone, FAX and internet as administrative expense.

(6). Subsistence, travel, park, lodge, food and drink as administrative expense.

(7). Stationery, printing and postage as administrative expense.

(8). Uniform clothing, cleaning, PPE and consumables as administrative expense.

(x). Equipment SHALL BE ZERO as fixed asset charge - fixed assets can only be written off over many years they are not a "cost of sale".

(x). Repairs and Renewals SHALL BE ZERO as fixed asset charge - fixed assets are not a "cost of sale".

(x). Entertainment SHALL BE ZERO as administrative charge - VAT liabilities on costs involving UK people.

(x). Rent, Rates and Water SHALL BE ZERO as administrative charge - capital gains and tax liabilities on business premises.

(x). Commissions SHALL BE ZERO as administrative charge - tax liabilities from those that get commissions.

(x). Heat and Light SHALL BE ZERO as administrative charge - costs not wholly and necessarilly for this account.

(y). Salary shall be a fixed monthly administrative charge - may be the income tax threshold.

(y). Pension shall be a fixed monthly administrative charge - may be up to the level of salary.

2. "Marketing" shall be very specific as a contract hired service and "cost of sale".

3. Most purchases are "cost of sale" necessary to do a job with no fixed asset valuation. Administrative costs are a published HMRC allaowance or are minimised.

VAT Accrual:

1. VAT is a balance between incomming VAT on sales and outgoing VAT on goods and services. All sales payments are presented as a NET and VAT amount. Please ignore gross amounts because they serve no reporting purpose.

2. "Sales" payments into the bank are easy to identfy and record as a payment type of task in the dairy.

3. "Hire" payments from the bank are easy to identify and record as a hire type of task in the diary.

4. "Supplies" payments from the bank are easy to identify and record as a supplies type of task in the diary.

5. "Expense" payments from the bank or cash will identify and record as an expense type of task with cost code in the diary.

6. All purchased payments are accumulated and presented as a NET and VAT amount.

7. Monthly management accounts are accumulated as NET and VAT for the quarter and the 4 fields presented as 9 values as:

(1). Sales UK VAT as VAT total banked in quarter.

(2). Sales EU VAT as zero.

(3). Total of (1) and (2) above as (1).

(4). Purchased VAT as VAT total paid in quarter.

(5). Balance of (3) minus (4) as amount paid to HMRC.

(6). Sales UK NET as NET total banked in quarter.

(7). Purchased UK NET as NET total paid in quarter.

(8). Sales EU NET as zero.

(9). Purchased EU NET as zero.

Roles:

1. LEX is a set of company accounts with no employee issues, with VAT returns, but no CIS returns.

2. SIB is a set of company accounts that include a set of employee accounts with VAT and CIS returns and a set of project hire and supplies costs.

3. SAN is a set of personal accounts based on time sheets without VAT return.

4. SIM is a set of personal accounts based on invoiced jobs and/or time sheets with VAT return.

5. HR data as:

(1). Name of person or company.

(2). Kind as person or company.

(3). CIS registration or none.

(4). VAT registration or none.

(5). VAT-Group (quarter end VAT return) or none.

(6). Year-End company (annual return) year end day-month or none.

1. Accounts:

1. Every person, project and company has a diary and every dairy has an account.

2. Accounting data is consolidated by the week, month, quarter and year.

3. It is critical to ensure that personal expenses are not confused with company purchases. A person may claim expenses from their company, but a company claim expenses from a person.

2. Purchases; What to do:

1. Every time a purchase is made, an accounting task must be added to the applicable diary. If the payment is from a personal account, then select your personal diary to add the task. If the payment is from the company account, then select the company diary to add the task.

2. Click the date to see the add task type list of buttons.

3. Click the "Account" button to see task subtype list of buttons.

4. Click the "Expense" button when its a personal expense.

5. Click the "Supplies" or "Hire" button when its a company purchase.

6. Fill in the account form with a subject and message that includes the supplier, purpose and project name if applicable.

7. Enter the quantity, units, cost and select the VAT as none, included or excluded.

8. Click the "Calculate" button so the Net, VAT and Gross amounts can be shown and verified.

9. The purchase receipt may be uploaded as evidence.

10. Every purchase will later be cross checked as a debit in the monthly bank statement and marked as "paid".

3. Personal Accounts:

1. Annual Return. All self employed people and all company Directors have a legal duty to provide an annual return to HMRC. The annual return covers the months of April to March and the return is due by January the following year.

2. VAT Return. People who choose to minimise their outgoings will be VAT registered to give them a 20% reduction in costs. A VAT return is made each quarter as a summary of the prior three months personal accounts.

3. Monthly Summary. People will have their income and expendature consolidated into a monthly summary each calendar month. The monthly summary gives a partial indication of what the quarter and annual returns will look like.

4. Weekly Summary. People who use time sheets have that time sheet information costed and summarized each week. Labour charges may be invoiced with reasonable expenses to the applicable company.

4. Personal Accounts:

1. Annual Return. The company has a legal duty to provide an annual return to HMRC and Companies House. The annual return covers 12 calendar months with a year end date that is dependent on when the company was registered. The annual return is due to HMRC up to 9 months after the company year end date.

2. VAT Return. The company has a legal duty to provide a quarterly VAT return to HMRC. A VAT return is made each quarter as a summary of the prior three months company accounts.

3. Monthly Summary. The company has its income and expendature consolidated into a monthly summary each calendar month. The monthly summary gives a partial indication of what the quarter and annual returns will look like.

4. Weekly Summary. Daily time sheets are consolidated and costed as a weekly summary of labout charges. Labour charges are validated against contractors invoices and extrapolated as project costs.

5. Time Sheets; What to do:

1. Each person who wants to be paid has a duty to clock in and clock out each day. Default information is provided to simplify this action, but the defaults should be overtyped with correct information. It is important that the primary work place is selected to ensure that costs are assigned to the correct project.

2. Every time sheet can be viewed as a diary task. If the time sheet task is shown pink, it should be clicked for it to be costed so it turns green.

3. For each person, their time sheets may become invoiced lines in their weekly invoice to the company. When everything is complete and correct, the weekly invoice number will automatically be shown in each time sheet that is to become part of the invoice.

4. At the end of a week, click the date and add an "Account" task.

5. From the second menu, click the "Invoice" subtype.

6. Fill in the subject and message as the invoice header information with details of the project locations.

Personal Accounts:

1. Two kinds of expense are (1) cost of sale billed to the company and (2) administration fee at personal cost.

2. Administration cost codes is used for accounting, legal, general fees and entertainment.

3. Cost of sale may include cost codes for subsistence, travel, supplies, hire, training, telecom, print, uniform, etc...

4. The annual report shows transactions by the month with income and outgoing sub-totals. A balance is shown as income minus outgoing each month, but this has no relevance.

Personal (supplier as contractor) Accounts:

1. Three kinds of transaction are (1) revenue as paid invoices (2) purchased supplies and hire costs and (3) expenses as staff invoices with labour and expense costs.

2. Revenue is cross checked with credits into the company bank account. Revenue gives rise to two factors as (1) Sales Net Income and (2) Sales VAT.

3. Purchases are cross checked with debits from the company bank account. Bank charges are a purchased cost without VAT.

4. Expenses are staff invoices include labour costs and expense costs - CIS is deductable from labour but not from expense costs. Purchases and Expenses give rise to two factors as (1) Purchased Net Outgoing and (2) Purchased VAT.

5. Annual accounts need to include a breakdown of all purchased expendature by cost code with the identification of (1) cost of sale cost and (2) administrative costs.

6. Taxes are due on the difference between sakes revenue and cost of sale, ignoring administrative costs.

7. Project invoices are accumulated as potential or real revenue to the company.

Project Accounts:

1. Projects have account information shared with client, contractor and people working on the project.

2. The site manager and site supervisor are responsible for the project profit and loss account.

3. Personal time sheet data for hours worked is shared with each project as hours * rate = cost. This labour time may be billed to the project or may only be billed to the company.

4. Personal supplies and hire costs will be invoiced to the company and may be billed to the project at the agreed rate.

5. Personal supplies and hire costs may be billed to a project at the quoted rate.

6. Projects only show NET amounts. VAT is added to any total of net amounts when invoiced. It can be assumed that VAT is charged on all purchases that are billed to the project. Projects may have many phases and each phase must be identified on all transactions.

Project Account:

(1) Personal time sheet hours with optional project rates.

(2) Personal supplies and hire transactions with optional "billed-to" project rates.

(3) Personal supplies and hire transactions with optional "billed-to" project rates.

(4) Project labour transactions for contracted work done using the quoted project rate.

(5) Project invoice showing invoice lines for any of the above transactions with one client and one supplier company.

What is a Project:

1. A Project is a Quotation that becomes a Contract to undertake some work at a client site that is Invoiced.

2. Each and every Contract is a distinct Project to be Invoiced, even when many Contracts are being undertaken at the same client site.

3. Cost alloction must be able to easilly identify the correct Project so the client can be Invoiced in accordance with what was Contracted to be done.

4. Definition:

(1) Quotation becomes a Contract.

(2) Contract becomes a Project.

(3) Project is set of costs.

(4) Project becomes Invoice.

(5) Invoice reflects the original Quote.

5. A Project is NOT a client site. A client site without a Contract cannot be Invoiced.

6. Every Project must have a Contract that may be an accepted Quotation. Every Project Invoice must reflect the fees quoted in the Contract.

* More than 600 construction companies became insolvent in 2017 because cash flow was not managed. * Every tier-1 main construction company showed an overall loss in their 2017 accounts.

Client Personal Accounts:

1. A client company account is one or more project accounts.

2. A reason for sharing project accounts is that the client has the right to see that information in their client account.

3. Where the client can see and understand the complexity of all the costs that go into a project, then they become more understanding of the resulting invoice.

4. It is hard for a client to ask for a discount or withholding fee when it is clear what the costs have been for the work undertaken.

Document Control.

1. Document Title: Personal Annual Return.

2. Description: Personal Annual Return.

3. Keywords: Personal Annual Return.

4. Privacy: Shared with approved people for the benefit of humanity.

5. Edition: 1.1.

6. Issued: 2 Jan 2018.