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Re: Fwd: Article on Accounting


On 3 Jun 2008, at 22:47, Luke wrote:


On Mon, 2 Jun 2008, beamends wrote:


The after asking round a bit, it seems the vast majority of small
businesses (>3 employees) have no computer system at all, pay a
book-keeper to enter things (they don't know, or care, what into),


This is very much not my experience in the U.S..

For almost any business here, three employees or more, the idea of not
having a computer of some kind involved, is almost unheard of, at least in 
my experience.


I think he meant less than three employees.


...
many of us elect to go the simple and well established route of setting up a corporation, or more these days than before, a limited liability company (which is a sort of combination of a corporation and a limited partnership 
with no general partner).

...  You don't
actually need an accountant, even when a Ltd Co. until you reach the
threshold where independent auditing becomes mandatory.
What exactly is a limited company anyway? You keep talking about them, but I am not familiar with non corporate or non trust structures in the 
UK.
A limited liability company. I believe that limited liability companies are required to state themselves as such on their stationary, invoices &c (as the sole-trader Pete's Plumbing must state "Proprietor: Pete Purvis"), and although a trendy modern company might head themselves "Trendwords Design" in big print at the top of their letterhead and in small print at the bottom "Trendwords Design is a limited liability company, VAT number 123345, registered office 123 Some Street", it is adequate (and quite traditional) in the UK to simply say "Bob Smith Hauliers Limited" (or "Frank's Fruit Ltd.").
The other information (VAT number, address of registered office) must also be given on the stationary, but it's not uncommon here in the UK to see "Bob Smith Hauliers Limited" or "Frank's Fruit Ltd." on the side of a van.
The owner knows what's going on because he's there going it. Reports are 
fine, but more often than not they will only back up what the owner
already knows. There is no need to try an operate a small business as
though it were Megacorp. We've just had a very quiet week. It happens


Here, to operate "as a megacorp" is much the same as operating as a
"minicorp", and is, imho, considerably easier and cleaner than operating 
as a soul proprietorship.
I think he just means, "due to the hands-on nature of small business, reports aren't so important in their accounting software". The boss knows that he is making less money this week because fuel prices have gone up, and he doesn't need a report breaking down costs by department. 

Stroller.