I have a few clubs and pubs and I would say the difficulties that arrive are normally because it is a cash business with potentially lots of people handling the cash. I insist my clients reconcile the cash each week, so I get a sheet with the daily takings along with 'z' readings attached from the till. They then have to show me where the cash has gone, net wages, incidental costs (with receipts attached) cash banked. So basically you have takings less bankings and expenditure should equal cash in hand (trhough there will inevitably be small differences from over/under ringing in).
If using Sage, I usually rename 1230 as 'Takings a/c' and then transfer bankings into main account.
The rest of the bookkeeping can be done as usual without any problems.
Ive done loads of vat returns for pubs & theres a large amount of paperwork involved, like Rob the customer must write down his cash income/expenditure. Just beward of pubs as most accountants are often wary as they dont like to pay up.
If you carry out a professional service, such as bookkeeping, you can exercise a right of Lien over the clients records and retain them until you have received payment.
The problem with pubs is that people go into this type of business thinking they know about pubs from the other side of the bar but in reality it is alot of hard work, couple with that is that breweries tie landlords into unreasonable (In my opinion) leases and charge top price for beer etc. A freehold has a better chance of operating profitably as they can negotiate price or receive a barrelage discount. But pubs are going out of business every day.
One way to overcome this problem is to agree a fixed monthly bookkeeping fee. I would say somewhere between £75 and £150 per month would cover most sizes and get that paid ona standing order. If you are comfortable with dealing with the year end then maybe incorporate that into the monthly payment.
One other thing while I think about it, make sure the landlord gets an independent stocktake at the year end.
Thanks Lisa Jo for your reply. Bob, that is also a question that I would like to know the answer to. I have a client who has just paid me, but I think was trying to get out of it. I was going to hold their paperwork until the cheque had cleared. Luckily thay have now coughed up, still owes me, but happy for now. The pub potential client never turned up, so that was a waste of time!
Obviously the next step for the client who owed me money was a letter, then another stronger letter etc. Then small claims court if no sucess.
RobH wrote:breweries tie landlords into unreasonable (In my opinion) leases and charge top price for beer etc. A freehold has a better chance of operating profitably as they can negotiate price or receive a barrelage discount. But pubs are going out of business every day.
Anything like the petrol companies paid to their franchises - tiny% of fuel sales ?
My late mother ran a TOTAL franchise and she could never make ends meet, even with the shop sales.
-- Edited by ProBowlUK on Friday 26th of February 2010 03:03:12 PM
-- Edited by ProBowlUK on Friday 26th of February 2010 05:08:47 PM
The client has to set it up with their bank. Always useful if you get their bank's standard SO mandate and complete as much of it for them as you can and then ask them to sign it and give to their bank (not sure if you can just post it on their behalf). I used to set this up quite a bit in the past but without too much complaint. The difficulty is that I find it tricky to raise the fees when they have a monthly SO in case they say' well Rob I was actually going to say I'm thinking of doing my own books from now on'! However the regularity of being paid probably outweighs the negative points.
It's around 52 a day and counting. Really sad - my son lives in a hamlet which has what was a very good pub. The manager's (no longer freehold) disappeared middle of January with the Christmas takings, it was closed for a couple of weeks, now got new manager's but don't know how long it will last as last week (their 2nd week) they had a pub quiz on the Wednesday which was well attended but basically said at the end of the evening "if the locals didn't use it they would lose it".
The 1st vat returns that I do I always ask for money up front, but, they are usually ok with this as they take it from the till so its not like they havent got it. I dont get involved with stock unless a professional stock taker as passed on figures, I believe this is compulsory now for some breweries. I do feel sorry for landlords though as they have to virtually work 2-3 days for nothing, some have been in the business for decades & you can usually tell which ones. Ive done some pubs as well, whereas the earning potential is great so all depends on the area. Accountants always tell me, never touch em but I always make my clients aware that I have over 20 years of experience in credit control, works every time.....