Description of overheads

 

Overheads are the expenditures to the business that is taken away from the profits such as;

 

o    Hardware

o   Software

o   Office Improvement

o   Marketing

 

Staff payroll is also an overhead but is not included in this section refer to section 3 for payroll overheads.

 

In order to monitor our overheads for calculating how much extra money we can afford to spend or charge to clients as fees the following plan must be put in place:

 

Recorded daily

o    Money received

o    Payments made

o    Invoices raised and sent by clients

o    Invoices received from suppliers or other consultants

 

Recorded Weekly

o    Staff timesheet

o    Petty cash summarised and recorded

 

Recorded Monthly

o    Staff Expenses collected and reimbursed

o    Bank reconciliation

 

Recorded Quarterly

o    VAT Returns

 

These will be recorded using simple spreadsheet accounting software called Sage Accounts to report income and expenditure which should be easy to operate from one financial year to the next. This will also enforce crucial tax reporting obligations within the business kept up to date at all times with supporting evidence such as receipts, invoices and bank statements.

 

Architecture practices are not likely to come into financial difficulties with result of overhead spending but more likely to overspend on structural issues or stationary.

 

Table of Overheads/Capital Expenditure

 

Table detailing the expenditures over the five years