‘five S’ Approach

Whichever book-keeping system you use, there are some key principles that should be adhered to. The ‘Five S’ approach is a helpful way of remembering these:

Other Good Practice

• If you use any money from your till to pay for anything, always put a receipt in it immediately.
• Always pay money into your till for any drinks or snacks you consume.
• Keep your till rolls as part of your business records.
• Print off Z readings at the end of the day and keep these with your records. (Z readings are a printed summary of sales for the day which your till can print off. Z readings clear the till of this information, while X readings give the same information, but do not clear the till of the data.)
• Check that the cash (and any receipts) in your till at the end of the day reconciles with your till readings. Keep a record of this information.
• Check your bank statements monthly against your paying-in book and cheque book and your list of standing orders and direct debits.

• Set up payments for gas, electricity, rates and telephone on monthly direct debit.
• Don’t leave cash lying around your office – always keep it in a locked safe (and restrict who has access to your safe).

Year–end Accounts

What Are Year-End Accounts?

Year-end accounts are a summary of your business transactions that shows what profit (or loss) you have made, and details your assets and liabilities. Your profitability is shown in a ‘profit and loss account’ and your assets and liabilities are shown in a ‘balance sheet’. Your accounts are normally drawn up by a qualified accountant who will also be dealing with your tax matters.

As a sole trader or partnership you are not required by law to have a formal profit and loss or balance sheet drawn up, but it is still good practice to do so as the information will be required for your self-assessment tax returns. Well-presented accounts are also important if you want to raise money or sell the lease or freehold of your pub. They also provide you with a clear indication of how the business is performing.

Who Needs To See Them?

In the case of a sole trader or partnership, no one needs to see your accounts legally, but you will have to submit tax returns which amounts to supplying the same information that is displayed in your accounts.

In the case of a limited company or a limited liability partnership, you are required to have formal accounts drawn up, which must be submitted to HM Revenue and Customs, and Companies House. Small companies and limited liability partnerships can submit unaudited, abbreviated accounts to Companies House if they meet certain criteria (which pubs operating in these ways are likely to meet). There are strict deadlines when accounts must be submitted to HM Revenue and Customs and Companies House, and failure to adhere to these can result in substantial fines and other penalties.

When Are They Drawn Up?

Accounts are drawn up at the end of your financial year, which is normally a 12-month period; however, they can be shorter or longer than 12 months in some circumstances. The choice of your financial year should be discussed with your accountant, taking into account taxation and operational issues.

Presenting your business records to your accountant promptly and in a well-organised way will help prevent any delays in preparing your accounts. If your accountant has to chase lost invoices or bank statements this will hinder the process and possibly cost you more money in the long run.

Understanding Your Accounts

It is important to understand the information presented in your accounts. Rather than simply having your accounts posted to you, ask your accountant to go through them with you and explain what the figures mean and how things can be improved for the future. Learning a little about accounting is very useful. You do not have to become an expert, but it will give you a greater understanding of your business as well as the confidence to ask your accountant or book-keeper questions about your financial performance.