Accounts and Taxes

[libra]

Any youths here running a web design or web hosting business and does accounting? My mum was explaining it to me, so cheem. Was wondering what stuff we need to include. Like freelances.. what can we include into the business accounts? depreciate? what to depreciate other than our health?

[alva chew]

Depreciate your office equipment like computers, printers, scanners, etc.

Freelancers you can classify them as one-time labour and charge it off to as expenses in you P & L

[libra]

nono.. .. not quering about how to enter into the B/S and P&L. I mean, I am a freelance, my computer has been depreciated completely long ago. I don't know, my books are really simple... looks too simple..

[fred]

Originally posted by alva chew
Depreciate your office equipment like computers, printers, scanners, etc.

Freelancers you can classify them as one-time labour and charge it off to as expenses in you P & L

Yup, this makes things easier

[alva chew]

libra, if you are a freelancer, you are not obliged to file with IRAS, so why bother about accounting.

The most you probably need to do is simple cash accounting and keep check of your total cash outflows and inflows.

Simplicity is good what...

[libra]

can't. i operate off a relative's private ltd, I operate like a department, so I need to close my "department'' accounts. need to file for company tax and income tax as well.

[fred]

private Ltd ?? huh.... then you better look for an accountant, else you wont be able to pass the auditing

[libra]

yeah. kinda simple, because my relative has got 2 CPAs in his office, who are doing things that are totally not related to accounts.. haha. I don't know, but she asked me to hand her my B/S and P&L by end december so they can work something out for closing accounts during February. but darn.. I got too much going out of my accounts. Petty Cash: S$850 - There is only 5 of us. Bad Debts: S$1033. I have nothing to depreciate, but my B/S can't balance. Difference of S$920 odd.

Gross Profit: S$6220
Net Profit: S$3100. <== Problem lies here, can't find the amount that should be less off $6220 to get this amount.

What should I do? Non-Operational Expenses..$920?!

[alva chew]

sounds like your accounts are in a mess... and how come can have bad debts one?

what kind of credit terms you give your clients? any agreements signed?

[libra]

yeah. 5 different sections of bad debts.
1) One has owed me $100, has been 2 years, no replies.
2,3,4) Each owes $50 odd dollars. Don't think I'll be getting those back. total up $183.
5) $750 is a client who can't pay up. individual, declared bankruptcy. Wasted effort on this.

glad you figured my accounts a mess. I found an extra 400 of expenditure on software. found the darned receipt. so we got a still terrible case of $520 Non-Op Expenses.

[alva chew]

Win liao lor... wait 2 years for $100. Your client is a cheapskate man...

You probably want to come up with some payment policies to prevent people from ripping you off.

[fred]

Put it into entertainment fee ;-P

[libra]

i cleared it! thanks fred. i placed them into staff welfare, entertainment fees, and increased the petty cash claim for 2 lunch treats. Receipt N/A. Food Centre Lunches. okay.. so now I have S$20 non-op expenses.. fair enough. can close now. thanks for the idea fred.

Alva: no choice lar.. the interest rates don't seem to shake them. my dad's friend, so I can't exactly sue him, considering the family solicitor and advocate is under my dad.

[alva chew]

Simple. Take those debts as the price you paid for goodwill and portfolio building. Stridec Systems does a lot of projects under cost out of strategic partnership and goodwill.

[libra]

yah. I have given about 10% of the gross profit in discounts. the company policy is that we don't give more than 10% of gross profits in discounts, means for each project we have to calculate the estimated gross profit and give a maximum discount of 9%. the indicative 10% is used to cover where the gross profit is miscalculated.