Bank Overdraft

[sweetpenny]

I have recently opened a separate bank account to use exclusivly for my business(Sole Trader). I have operated my business from my personal current account until now.

I have asked the bank for an overdraft of 10,000 in order to buy more stock, they have requested accounts. Now, I don't keep formal accounts such as Trial Balance, Balance sheets etc.

My current turnover would easily cover this overdraft on a monthly basis and I reckon it's a bit formal for them to ask for accounts as they can see my cash flow is healthy.

What type of accounts should I submit and for what period? 3 months, 6 or a year.

 

[Domo]

You will have to ask the bank what accounts they require - I would imagine that they want the last 3 years.

How do you declare your taxable profit or loss if you haven't kept accounts of some sort?

 

[Bank Manager]

Bank will seek either formal audited accounts (if you have them) or at least management accounts which show your sales, cost of sales, costs, aged list of debtors and creditors and ideally a forecasted cash flow.

Really, the person who needs this information even before a bank does - is you. You'll want to know if business is profitable and you'll want to anticpate any cashflow issues in advance (long before any bank).

Hope that helps.

Regards,


BM