Charles Verrier's dashboard

I set my accountant (and the appropriate manager in the accounts dept) with logins when I first set FaC up). I think the partner has NEVER logged in, and the manager only logged in because I needed to show him something and talked him through it on the phone! (He liked FAC, but that didn't actually translate into, you know...using it).

I may have to consider moving...

Sadly no, they're a bit unreformed in that way. They're a fairly traditional Central London firm, with a speciality in contractors.

They have their own on-line bookeeping system, so other people's software rather throws them I think.

I think they still actually DO get the proverbial 'shoebox full of receipts' from some clients

I would change, but I've known the Senior Partner for about 20 years...

I stand corrected - the receipt of the deposit does create a tax point (although still delayed compared to the date of the RFP, and only for the VAT portion of the deposit amount) – Charles Verrier, on February 17, 2010 13:30

Yep - that would work - you could probably work something up by just creating a custom invoice template with altered wording using existing FAC tools

I suspect the issue is that, if the project duration is unclear, you can't set a due date for an invoice issued at the start, and the client may not accept an invoice up front for services not yet delivered. – Charles Verrier, on February 17, 2010 13:23

RFP's

Because RFP's are not 'real invoices', they don't form part of your formal accounts, they're just bits of correspondence that you and your client have agreed will be used to confirm that payment is due.

There are two perceived advantages to RFP's

1. VAT is considered as having being charged only when the money is received, or when the 'real' invoice finally gets generated (whichever comes first). So, if there's a gap of a few months between RFP and payment or invoice, then you can defer paying the VAT to HMRC until the next VAT quarter - handy for cashflow.

2. The idea was, If you haven't issued an invoice, then you don't have a debt on the books - so no bad debts and (in bigger firms) no need for a bad debt provision! Invoices only go out when you've already got the cash in the bank.

RFP's used to be really popular with the accountancy profession - they've gone a little out of fashion now.

You can't do that in FAC, but I'm not sure you can in any other software I've seen either! An invoice is an invoice!

Firstly, why do you need two invoices? - can't you just ask the client for a deposit based on an estimate? Are they being picky about demanding a formal document before cutting a cheque?

If you really want to keep the whole thing in a single invoice, but still want to issue two distinct and 'formal' documents, then you could issue a 'Request for payment' (A common approach used by many firms).

This is a manually-created document that looks like an invoice but isn't (You must clearly mark it as such and not as an invoice). At this point - don't put anything into FAC (or maybe create a draft invoice so you don't forget it!)

The deposit payment from the client should be left as unexplained on FAC for the time being.

When the work is done, issue the 'real' invoice for the full amount. (Don't deduct the deposit value from the final invoice, because the VAT 'tax point' happens on this invoice and needs to be the whole amount). You could manually add a note to acknowledge that the invoice has been part-paid and confirming the balance due.

As soon as the real invoice is on the system, go and create an explanation on the deposit amount to match it with the invoice (This ensures that you now have an accurate measure of the amount owing on the Balance Sheet).

When the second payment comes in - you can match it against the part-paid invoice.

**
If FAC let you do debtor statements, then you could have issued the invoice up front, and then sent a statement when the work was done.

Sadly - FAC doesn't do statements (cough cough, Ed)!

**

By the way Ed/Roan - RFP's would be a nice feature! (Really a variation on a draft invoice where the wording is diifferent, and with an extra stage in the invoice status). No effect on the accounts, but you'd need to provide for extra reporting of outstanding RFP's, etc.

Just thinking outsde the box on this....

There are tools around which would allow you to merge the multiple PDF's into a single file.

I use PDFCreator, which has so far met all my needs, including merging multiple documents into a single PDF.

http://www.pdfforge.org/pdfcreator

...and it's freeware!

The only other thing you may need to remember is that, while your Dividends are indeed the mechanism for taking profits out of the company, you can't take ALL the profit - you'll need to pay Corporation Tax out of that as well.

My accountant recommends that, whatever dividend you take, you should then move an additional amount equal to 25% of the dividend into a savings account at the same time to cover your future Corporation Tax bill.

If you don't think you can afford to do that, then you need to reduce your dividend until the figures work for you.

It's also worth mentioning that cashflow often means you may not have the cash in the bank at the best time to declare a dividend. You can still 'declare' the dividend (showing it in the DIrectors Loan Account as owing to you), and then take the cash out over a period of time, as your clients pay their invoices.

I did a summary of the process for showing the declared dividend in the DIrectors Loan Account here....

http://community.freeagentcentral.com...

How to annoy Ed and Roan ......make comparisons to Xero!

Hmmm - I'm sure GetSatisfaction used to do a better job of finding similar threads - I just tried typing 'Tax Timeline' and it failed to find one of the two threads on this topic

Not frustrated - I know you're a small team with a to-do list the size of Dorset, but if your roadmap isn't "fully transparent", then I wonder if this means you're not really going to be able to prioritise things very effectively. (maybe worth a check to see if there are other things that have been entered twice).

So, it WASN'T on the roadmap already?

Despite there being a thread on here from a year ago where Ed agreed this would be a great idea?

http://community.freeagentcentral.com...

Yeah - same for me on the invoice total - otherwise its just counter-intuitive.

A 'carried forward total' would be OK, but as I imagine that would be very tricky, it would be better to have nothing.

Yep - I'd still appreciate it.

The pace of releases has rather slowed of late - are you FAC guys working on something big? Did you run out of cheese codenames?