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Credit note is a document that credits (specified and agreed amount) towards sale made. For example, we are selling furniture and customer wrote to us, that furniture arrived damaged, but they still like to keep it. We raise a credit note for the damaged part, say we agreed to reimburse 10 pounds or dollars. There are a few ways to go about refunding the credit note amount: First one – is to make a cash payment to the customer’s account. Second one- is apply the credit note directly to the sales invoice, if that purchase was on credit, therefore reducing the amount due to be paid. Lastly, we may offer a credit amount towards a next invoice, if invoice was already paid and by this we will also reduce amount to be paid by the customer. Credit note should mention: Credit note number Date of credit note Sales invoice this credit note is referred to Amount credited back Reason for the credit note Description of items credit, units, price per unit Total amount of

 Legal Entities In this blog, we look into the main legal entities, that can be formed in the UK, differences, and advantages, which is important to look into before either opening own business or joining a company as an independent bookkeeper.  The most common is a limited company. The process of registering is through the Companies House register and advisable to register at the same time for the Corporation tax with the HMRC tax office. The whole process will not take more than 15 minutes and 12 pounds. The preparation includes: choosing the name, business address (which can be different from the business director's address), select the secretary and directors team, think about shareholders (or who will pay to set up initial equity, minimum a pound).  The obvious advantage of running the limited company as the name suggests is separate from the personal liability and own finances. Therefore, should the company be liquidated, it will not affect your situation, nor would you be re

In the previous, we have mentioned, that we need to add the Customer name, address, and contact details on our invoices to them, but we also briefly said we need to add also information about our business. Generally, we make a template, we reuse, for all sales invoices we send to our clients for goods and services. It does not need to be fancy, but we need to ensure we display the required information. So here are the compulsory details to mention about our business: Business name Before we begin trading, we choose our business legal name and if we are registered as a limited company (read about it in the next post), we officially register this in the Companies House (aka Registrar). We may also have a trading name, which we use instead of or together, ie Smiths and Sons ltd t/a (trading as) Flowers Family ltd. Business registration number If we are a limited company, we would need to add our business registration number as provided by the Companies House. Business address This would b