Net Income Not Matching Actual Bank Balance ??

[tobeloy]

Slightly confused but should net income be matching bank balance? Self employed and update my records every week however now at end of tax year my net income after all expenses does not match my bank balance even accounting for a few hundred I am owed, I have accounted for everything so slightly confused..

Appreciate any suggestions :)

[factor-fiction]

Do you never spend any of your income then during the tax year?

[tobeloy]

Yes but that is expenses.

[boxtops]

Net income doesn't match your bank balance

Putting it simply

Total income, less tax and NI (assuming you have no other income
less all your expenses, household bills, cash drawings etc
equals your net underspend for the year.

It may not exactly match your current bottom line bank balance, have you accounted for bank charges and so on?

[factor-fiction]

Have you gone through each entry on your statement and tried to account for them? It could be charges. Maybe you made a withdrawal you had forgotten about. Maybe the opening balance was different to what you thought.

[tobeloy]

Ok my business is not a difficult one as is mainly cash based and any account work is paid 1 month in arrears. I record every sale, expense and any personal drawings onto the account sheet at the end of the week without fail. When I bank any money it is usually less expenses such as fuel, my other expenses usually are debited from the bank either due to card payment or DD.
I have not paid tax yet for this year, my NI is monthly and along with other DD is recorded on my accounts sheet for that month, I don't have any bank charges or other outgoings yet it seems I have a deficit of 5k ?? Slightly baffled

[factor-fiction]

The only way is to check each item on your statement. Did you check your balance /statement at any point in the year? It must be something major to amount to £5000

[Maydup]

I was going to suggest you check the opening balance for the year as you'd have started with a credit or debit in the account. Otherwise it can only really be a missed entry or two.

[Maydup]

When did it last balance? If you do this each month, was it ok with the last bank statement?

[tobeloy]

I had a credit balance from last year so the deficit could be more now I think about it, looks like I will have to go through the figures again, I doubt I have overlooked anything but it could be the programme I am using is at fault but I doubt it.

Thanks for your suggestions..

[tobeloy]

Well I have just rooted out the problem and it was an error in the actual programme i was using and it had not calculated the personal drawings into the equation which is really odd as the programme worked fine the last tax year.

Cannot believe it was under my nose looks like I will be changing said programme. Sorry if I wrecked anyones head

[boxtops]

Glad you have found it - I had a similar situation at work when I couldn't get a spreadsheet to balance, and I hadn't included enough lines in one of the additional formulae.

Thanks for letting us know!