To maintain the sales book you should do the following:

1. Write the date you raised the invoice in the first column

2. Write the invoice number in the second column. All invoices should be numbered. These should be consecutive. If for any reason you duplicate an invoice number, call the invoices 101 and 101a, for example. If you miss out an invoice number, write it in the book with” cancelled “ beside it. Both the Inland Revenue and HM Customs and Excise get very worried if you don’t do this.

3. Put the name of the person the sale has been made to in the next column.

4. Then head up the next three columns “Net”, VAT and”Gross”.
5. In the “net” column write the value of the invoice before VAT.

6. In the “VAT” column write the amount of VAT charged on invoice. This is 17.5% of net value unless the supply is zero-rated or exempt. To decide whether the sales you make are standard rate, zero rate, exempt see Appendix 1.

7. In the “Gross” column write the total value of the invoice, that is the net value plus the VAT.

8. Next have a “paid“ column. When you receive money for a sales invoice write the date you received the money in this column.

9. If you only have one business bank account and pay all money received, however it is paid to you, into that bank account you don’t need any more columns. But, if you have more than one bank account then you need a final column. In this one you write the bank account number or name into which the money from the invoice was paid. If you took it in cash, write ”cash“

When you’ve done this for a month you underline the last line used in the month and then add up all the column’s. This is where a spreadsheet comes in really useful. Remember to use the feature on your spreadsheet and if you don’t know how to use it look it up the “help“ feature. It will save you a massive amount of time.

There’s one really useful check you can do at the end of each month. The total in the gross column should equal the total in the net column plus the total in the VAT column. If it doesn’t, go back and check each line to find out which one doesn’t work, and put it right. If the invoice was wrong, correct it and send a new version to your customer.

Finally, there’s one other important thing to note. If you give a customer a discount on an invoice, you must say in the date paid column that a discount was given and say how much it was. It helps if this is done in red ink, but its not essential.

What does the sales book look like?

Something very much like this:

What does the sales book tell you?

The sales book tells you:

1. Who owes you money. All items not marked as paid are owed to you.

2. Your total sales for the month or a quarter just by looking at the total of the net column, or by adding them up into quarterly figures.

Remember, the sales daybook is for accounts purposes. The total VAT shown in the sales day book is not the amount of VAT which goes on to your VAT return at the end of a VAT quarter.