ASK & DISCUSS INDEX

10 years, 9 months ago - Yen Rickeard

For more information on National Insurance and PAYE, and self employed persons selling their services, look up

http://www.hmrc.gov.uk/specialist/fi-notes-2012.pdf

Part of the (yawn) background business stuff you have to deal with in order to do the more interesting stuff.

Yen Rickeard

10 years, 9 months ago - Lauris Beinerts

I can tell you how this is done in a medium sized TVC produciton house.

First, there is Sage, which is used for all the calculations (both payroll and freelancers / ltd companies).

Once the calculations are done, then the payment is manually made in the online banking system, if it is a first time receiver, you need to set it up, but most of the time those have previously been paid, so it is just filling in the amount for a new payment. But at the end of the day, it is a manually created online payment.

And then from Sage, the reports are created for accounting / reporting / HMR / etc.

NB!!! When you use freelancers that are self-employed, in most cases you still need to pay their National Insurance! This is a major talking point, but most of the people have it wrong. Even for self-employed people that pay the periodic NIC (2 pounds per week I think?), most of the time they still need to pay NI based on invoicing. There is a list of type of people (usually department heads, creative people, people who use their own equipment), who are exempt from it. Also, if they have the Lorimer letter (but again, I think only the previously mentioned types can get it). But most of the time - NI needs to be deducted.

10 years, 9 months ago - Parvez Zabier

Morning Alex
I am a Production Accountant and Bookkeeper. Pls give me a call and i'll make some suggestions
Regards Parvez Zabier 07958 654136

10 years, 10 months ago - Paddy Robinson-Griffin

What you've got sounds pretty typical, probably more streamlined than many people to be frank. You pay on invoice, so need the invoices, then you set up a bank payment. If they're regulars, the back payment system will have their details set up, so you enter an amount, reference, and hit send. I can't see how much simpler it can get. Done banks (eg Coutts) have different online applications with more complexity around regular payments/groups or importing spreadsheets of payments, but I don't think it'll save you much grief as the applications then become harder work. If it helps, the new Lloyd's mobile app is actually pretty convenient, so if you set up recipients at least you can handle it ad-hoc on the train home.

You might want to keep control by using purchase orders (promises to pay/official orders) so a producer can set the amounts and an admin staff can verify the invoice matches the PO, and pays if it does. It's usual for a PO to have the payment terms, budget codes, PO reference, job reference etc on it, and invoicing instructions. Frankly though, in the real world it's always a bit of a muddle. As long as jobs really are a few days and not running over a week, you're not dealing with payroll which adds a whole new tier of pain (many roles simply cannot be legitimately self-employed in film, and are forced into PAYE which you have to administer and deal with the whining).

10 years, 10 months ago - Paddy Robinson-Griffin

I'd be interested too! FWIW I've paid musicians and crew for tours (one day I spent over £1M! Although there was some trucking and freight etc in that too you'll be pleased to hear), tried to get fancy, but there are just so many variables I ended up just doing it manually as it was frankly quicker once you accounted for the huge variety of problems people manage to create.

One thing which I assume you're doing anyway, or should try if not, is to have pay cycles - invoices received by 25th of the month will be paid on 30th or go into next month's cycle - at least you can work methodically in bulk that way.

Or hire a bookkeeper.

10 years, 10 months ago - Alex di Martino

Thanks Paddy, I hear what you saying and it is pretty reassuring to learn that others go through the same "pain". I still wonder how to better handle the whole thing...hopefully somebody else may have some extra tips that may help ;-)

10 years, 9 months ago - The Post Factory

You may also want to look at an online accounts system such as Xero. You don't have to be a genius to use it, it can integrate with bank feeds or you can upload the statement to be able to easily reconcile. It does a lot of automatic work in matching your statement against the bills and payments you have put in. You can upload the PDFs of the invoices as a reference. Plus it is software as a service on a subscription basis so no big initial outlay/servers etc.

We don't have it completely integrated so we cannot make the payments within Xero, but with the right bank account it is possible. But if you don't, when you write a cheque, or send a Bacs, you can tick it off in Xero and use it to send remittance advice. And it tracks everything so you can easily go and see what happened when in the history. Plus you can log on from anywhere, so our accountants' firm can log in from their office and have access to all the same info.

Can't speak highly enough of it, and it was one of the earliest of these SAAS offerings but of course now Quickbooks etc are catching up with their versions as well.