Doing the accounts is never going to a task that fills the small business owner’s heart of the with joy.
If you have read any of the content on our site, you’ll know that we want to try and challenge some of the negativity about accounting and get the business owner to see the benefits to their business of taking control.
This post is an introduction to how people actually use the CARL System of accounting in its simplest form. We have customers that have been using CARL way before internet accounting was even thought of, however they have been successfully providing accurate business transaction information to our partner Lloyd, Thompson & Carl Accountants in a paper form and getting back their accounts within weeks.
The secret to this is to provide an easy to use, error proof and memorable system for identifying what a transaction is, write the code next to the transaction and then send that to the accountant to process. What causes problems both in the past before accounting software and now with various types of cloud based accounting systems, is the accountant not knowing what a transaction was for or not knowing that the client has misidentified a transaction or created a new account in the Chart of Accounts and putting the balances in the wrong place. All this requires sorting out by the professional and wasted time and increase costs.
In the manual form of the CARL System the client just needs to grab a copy of their invoices and/or bank statement and “Code Up” these documents with the right CARL Code as can be seen in a fictitious example below.
The statement shows the transactions and the RED ink letters are what the client wold jot next to them for the accountant to follow. The client can only use one of the codes allowed and in many years of usage we have not seen any client fail to grasp how to use it.
The key thing is once learned it becomes quick and easy each month.
Therefore the CARL system provides cast iron contract between what the client knows about their business and the transactions they have and what the accountant needs to know about the trading of the business.
Nothing can fall through the cracks.
Many years ago HMRC asked one of Lloyd, Thompson & Carl’s clients why they, as a business based near Newcastle, was using an accountant hundreds of miles away in Shropshire.
Quite simply they said they liked the CARL system and didn’t need to see an accountant face to face to sort of messy bags of receipts and the like.
Now that the internet age is here and HMRC is pushing us all to “go digital” with Making Tax Digital (MTD) for VAT being their starting point, the CARL System in its manual form is still alive and well.
Some businesses have such poor internet access, using a cloud accounting package is not feasible so businesses unable to use online software are going to struggle more and more. They will have to make trips to the accountant to sort out issues to ensure the accountant can submit returns in time.
All looking a bit messy and time consuming.
Don’t loose track of the prize here. Getting your accounts done for quarterly VAT is important if you are VAT registered but getting your accounts done so you can fix immediate issues and grow your business is what you want.
The CARL System allows you to give us the coded paper work i.e. bank statements, cash sheets and invoices in the post where you have coded up the transactions.
We input the data into the CARL System software for you and we can do your VAT returns and provide paper version of all your returns and ongoing accounts. If you wish you can use the system yourself and we can guide you.
Eventually you can do it yourself and be confident that your data is correct.
The CARL System software is a recognised HMRC MTD VAT capable system so your VAT returns will be MTD compliant.