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Thread: Almost a paperless office

  1. #1
    Moderator Kay is a Premium Member
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    Almost a paperless office

    Prior to moving house, Dave and I had to make sure we gathered together all the paperwork relating to our company's financial transactions. (Obviously this will be needed later for preparing the company accounts.) You know what? There was hardly any paper! I could hardly believe it and at first thought we'd perhaps lost or mislaid some of it. Not so. Nearly everything is done online. We pay all our regular bills by standing order or direct debit, eg hosting, one-off bills are usually via PayPal or debit/credit card. Our income is all online, usually the payer self-invoices, transfers the money to our bank account, and emails to let us know the amount, eg Google, Amazon, affiliate networks etc. Small payments and receipts are done via PayPal. The only things we have paperwork for are asset purchases, eg computers, and office sundries, eg stationery and postage.

    How about you? Do you have an almost paperless office or are you up to your neck in paperwork. I just wondered if our situation is the norm.
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    Publishing Mentor dsieg58 is a Premium Member
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    My situation is pretty much the same as yours. 99% of all receipts are digital. Bills are paid online, contracts are pdf'd, PayPal makes accounting pretty easy.

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    Marketing Mentor Mikl is a Premium Member
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    We pay all our regular bills by standing order or direct debit
    But, surely, you still need an invoice? After all, it's still a regular bill, regardless of the method of payment. The auditor still needs a trail, and you still need to support any claim for a VAT repayment (if applicable).

    I'm in the same position as you are with Google, Amazon, etc, but I still raise an inoice. How else can I account for the cash that appears in the bank account?

    Or are you saying that you do raise invoices, but you don't print them? That you just keep an electronic copy?

    Mike

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    Moderator Kay is a Premium Member
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    We have vouchers for everything, payments and receipts, and they're all electronic. There's no need to print them out unless some official asks us to. In which case we could print them out and hand them over for inspection. There's an audit trail there which can be easily followed. On the computer, we have a folder for each financial year and all the relevant documents are stored in there. The only papers we have relate to asset purchases and office sundries. Everything else is done entirely online. Even our bank statements are online.

    When we were moving house, I was concerned to make sure we took all the business paperwork with us and had anticipated that it would take up a bit of space in the suitcase. I was surprised how little there was.
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  5. #5
    Marketing Mentor Mikl is a Premium Member
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    I see what you mean, Kay. It's interesting that you find that works out well in practice.

    Like you, I get electronic copies of many of my purchase invoices. I know I could keep these in their electronic format, but I find it easier to print them for end-of-year purposes. If I didn't, I would end up giving the auditor a mixture of paper and electronic documents, and the electronic ones would be in different formats, which they would then have to convert to suit their own systems. Paper is clearly the lowest common denominator, but at least it is universally accepted.

    Similarly with sales invoices. I had a VAT inspection recently, and it was very convenient to be able to just dump a file of invoices on the inspector's desk and leave him to get on with it. If they were electronic, I would have had to sit down with him in front of the screen to help him find his way round my accounting system.

    And I'm interested in your statement "Even our bank statements are online." How do you give other people access to them? Do you share your on-line banking password? Or does your system provide a way of viewing the statements without accessing the full banking service?

    Mike

  6. #6
    Moderator Kay is a Premium Member
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    As with any other electronic document, if someone needs to see them, we'd print them out. We don't need to print them for our own purposes, although I do find it easier to do stuff like bank reconciliations on paper where you can make real tick marks with a pen. We're not registered for VAT - there wasn't really any need when we were living overseas and rarely buying anything from the UK. We might need to rethink that now but I expect the paperwork is onerous so I'm not in a hurry to do so.

    The huge advantage for us of having so much of the documentation in electronic format was that we didn't have to carry loads of paper with us - paper is pretty heavy after all.
    British Expat - helping people to live and work abroad since the year 2000.

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  7. #7
    Marketing Mentor Mikl is a Premium Member
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    ... if someone needs to see them, we'd print them out
    Ah, that's the key point. My view is that someone always needs to see them - namely, our accountant / auditor when drawing up our end-of-year accounts. So, I always need to print them out. (Well, I don't really need to, but I do find it more convenient.)

    Regarding registering for VAT, you said "I expect the paperwork is onerous". Let me assure you that it is absolutely not onerous. It is surprisingly simple. In fact, I expect you could handle it without any physical paperwork at all. It's just one very simple form which you submit once per quarter, and you can do the whole thing on-line. It takes me less than five minutes.

    There are many pros and cons of registering for VAT. But the supposed administrative overhead is a negligible one.

    Mike

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    Kay (2 August 2014)

  9. #8
    Moderator Kay is a Premium Member
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    Interesting! Thanks, I must investigate because we must have spent quite a bit on VAT in getting the UK "office" set up. It would be nice to get that back. I guess I'd have to charge VAT on any services which the company sells. The thought of extra paperwork put me off doing it before but if it's as simple as you say, then there's no problem. (I used to be an accountant but I'm OK now as long as I keep taking the pills.)
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  10. #9
    Marketing Mentor Mikl is a Premium Member
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    I guess I'd have to charge VAT on any services which the company sells.
    The test is whether your customers are likely to be registered for VAT. If you are mainly selling to businesses, then adding VAT to your invoices won't affect your customers at all. But if they are individuals, charities, or local authorities, then you will in effect be increasing your prices by 20%. So you would have to weigh that loss of competitiveness against the benefits of reclaiming the inputs.

    Going back to the theme of the paperless office, it occurs to me that the biggest disadvantage of my approach (that is, of keeping paper copies of all invoices, bank statements, etc) is not the storage space (one ring binder and one suspension file holds a year's worth of papers for my very small business). And it's not the effort of moving the papers around (I've been in the same office for over 12 years).

    The biggest cost is the effort of having to destroy them. I keep all my papers for the statutory five years, plus a couple more to be on the safe side. Then, each year, I destroy the oldest year's worth of papers. Because they contain a lot of confidential information (especially sales invoices), I need to shred them. Shredding a year's supply of accounting papers takes time, and causes my small desktop shredder to get all hot and bothered. Getting rid of that problem would a big incentive to going paperless.

    Mike

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    Kay (2 August 2014)

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