Introduction to partnerships and sole traders in Silverfin

The approach to Unincorporateds (a Silverfin term encompassing sole traders and partnerships) is very similar to that we use for companies, with changes as needed to cope with principles such as capital/current accounts and non statutory financial statements. This article describes these differences and presumes you have already completed the base Silverfin case study that covered corporates. These notes focus on the more complex partnerships entities - for sole traders, please follow this guidance but obviously there will only be one "partner".

Importing data into Silverfin will be the same as for any client and more reliant on the accounting software they use (or do not use). Nominal account mapping may be more complex due to the more involved capital and current accounts (see here for Chart of Account notes and here for a discussion on the different types of clients by their accounting sophistication).

Planning 

This follows the same corporate based approach involving Permanent Information, Points Brought Forward, Key Documents - Planning, Work Programme - Planning, Planning Budget and Points for Client. Obviously there are several changes to questions, with the main differences being:

Partners: This (naturally) replaces the Statutory Information reconciliation in corporates. It is a key document and contains the name of the partners (and date of appointment and retirement). It also addresses how we deal with Salary and Profit sharing for that client - further details on this are set out here as they involve the more complex capital and current account reconciliations. This is not needed for Sole Trader's with the only relevant field (the proprietors name for accounts purposes) is captured in Workflow 3: [Unincorporated] General settings - Sole Trader reconciliation.
Key Documents - Planning and Work Programme - Planning contains different questions and documents references as you would expect but are similar in approach to corporates.

Preparation

The vast majority of reconciliations here will be familiar from the corporate case study, with points of note being:

Partner capital/current account summary reconciliation: This is the key area (as you would expect) of difference and is covered in detail here. In summary:

  1. for clients with good bookkeeping and detailed nominal analysis of capital and current accounts, you should:
    1. select Mapped
    2. select the name of each partner in the column (being careful to match the right partner name to Partner 1,2 etc to reflect the nominal mapping already done), 
    3. and then ensure the results in the reconciliation tie into the brought forward balance and profit for the period.
  2. For clients where there is more limited nominal analysis in their bookkeeping, you should select Accounts analysis, and then complete work in the individual nominal reconciliations shown later the workflow.     

Estimates and private use adjustments: this is a straightforward schedule that should be familiar to accounts preparers from our previous files.

Individual nominal capital and current account reconciliations: where the client requires FC to split out the detail in their nominal codes, these reconciliations facilitate the analysis and further detail is set out here. Again, in summary, for each nominal code you can import the transaction in that code into the bottom half of the reconciliation (Actions, Import reconciliation data, From ledger) and then either assign each item or all items to a partner or a category (e.g. capital introduced, drawings, etc). This will then feed the Partner capital or current account summary reconciliation at the top of the Workflow.

Please note that for clients that do post profit share (and use an account such as Retained Earnings for the other side of the double entry), a nominal account may appear at the bottom of the Preparation workflow (called Retained Earnings or whatever account is used) under Unallocated accounts - this can be ignored as long as it does equal the profit for the period.      

UK Partnerships Accounts Production (workflow 3)

Again this is approached as per the corporate case study, with questions and input tailored towards non corporates. Note that as we are trying to standardise our approach, the accounts will be different to those we have prepared previously. The accounts can be tailored to a certain extent in this workflow and additional notes can be added through the Overview reconciliation (see here for help), but we are working to align our reporting process and ensure that we are doing appropriate tailoring but this is driven by our clients.

Completion

This is actually the closest workflow to corporates with changes only made in relation to areas such as corporation tax, shareholders, etc.