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Contents
- Operating practices
- Jargon and special features
- Sales mix
- Seasonality
- Factors affecting sales
- Prime records
- Customers, terms offered
- Suppliers, terms obtained
- Trade specific legislation
- General legislation
- Health and safety legislation
- Employment legislation
- Licensing requirements
- Sources of further information
Accountancy matters
Areas for review
Because of the way in which the Revenue compares the figures from the accounts for a business
- one year with another, and
- with the results for other similar businesses,
it is important that there is consistency between years in the way in which the accounts are prepared and that, as far as possible, the accounts are prepared in the same way for similar businesses. This consistency will also make any business review and inter-firm comparison more informative and worthwhile.
The Critical Review will highlight any apparent anomalies between years and deviations from the hairdressing trade sector norms. It will help prevent unnecessary selection for investigation if explanations for these apparent anomalies and inconsistencies are provided when the accounts are submitted to the Revenue. In particular:
a. ensure that only hairdressing consumables and items for re-sale are included in Purchases, so as not to adversely affect the gross profit rateb. identify any change in the composition of Purchases and Sales between years (for example, chair rentals included in Sales previously now shown separately in the Trading Account)
c. highlight any differences between years in the services and retail items offered for sale, terms of trade etc, if these are not apparent on the face of the accounts
d. if there is a change in the accounting treatment of Own Goods or the way in which Private Use adjustments are made, so that the accounts figures appear to be out of line with previous years, explain the changed treatment
e. ensure that it is clear which sector of the market the business occupies, and any changes in this respect, so it is clear whether the purchases:takings ratio which can be expected is at the upper or lower end of the range for the hairdressing trade
f. check cut-offs for Sales/Debtors, Purchases/Creditors and Stock if the purchases:takings ratio is not what would be expected
g. check that items which are known to be a feature of the hairdressing trade have been brought into the accounts, for example, proprietor's tips etc.