I am trying to figure out how I deal with the below within quickfile. Within excel I simply created a Directors Takings column which at the end of the year was balanced up with the Directors Loan Account and Drawings/Dividends.
The position I have occurs when I have been to the petrol station and purchased £100 of fuel + £20 Vat= £120 and then proceeded to spend a further £15.00 incl Vat on other items which are not business expenses nor tax deductible.
Where the above has all been paid from my Business Account via Debit Card how would I reflect this within my accounts.
I am okay with the Fuel element as this has its own nominal. But how do I record the £15.00 that I spent for personnel use. Do I simply create a Takings Nominal and if so how would this be created to ensure that the costs fall correctly on the balance sheet and P & L ( or not as the case may be ). I presume that this is the only option or would I simply show £150 (Debit) Bank Account , then £15.00 ( Credit ) DLA, then £100 ( Debit ) to the fuel nominal and the £20 as VAT
Cheers
What you would normally do here is enter only the fuel on the purchase invoice (£120), the personal expenses on that receipt (£15) would not get logged. You then mark the invoice as paid in full to the DLA account. Now from your current bank account you will see a debit for £135, you would tag that as a transfer to the DLA, leaving the DLA £15 in credit. That £15 sits on the balance sheet until it is repaid by the director.
Glenn
That makes perfect sense but as I have quite a lot of these type of transaction and would like to try and keep them as clear as possible would the attached be an option. I have indicated what I presume is your suggestion ( Option 1 ) and then also the ( Option 2 ) one which I would appreciate your input on.
Thanls
However you do it, the most important thing is that come the end of the year (or the time when you complete the next VAT return, if you’re VAT registered), only the business portion of the transaction should be logged as a purchase. The non-business portion does not belong in your company books at all.
As a self-employed trader I’ll sometimes take goods off the shop shelves for my own use, and my accountant told me to simply discount the cost price of these goods from the purchases ledger (in QuickFile I raise a credit note and refund to my drawings account), but I’m not sure whether you’re allowed to do the same thing when you’re dealing with a limited company or whether you’d have to treat it as a sale. Safest in your situation would definitely be not to put the non-business purchase through the books in the first place.
Another suggestion i hope would work is if i show the £135 leaving the Bank Account of which 100 would show against fuel and 20 against the vat with the further being shown as an amount to the DLA. This way the vat would balance and the extra 15 spent on sundries which are not business costs would be identified as an amount taken by the Director.
As said i am just trying to keep it as clear as possible and at least identifying the main supplier which matches with the Bank Statement
For Split receipts, i.e. part business, part personal spent on company card, i transfer the whole transaction as a bank transfer from business to the director loan account, and then raise an invoice for the business portion and pay it from the DL account on the same day as the receipt.
I also mark the receipt as CC=>DL (Transfer from Current Account to Directors Loan) and put the purchase / invoice number from quickfile on it also, the CC=>DL helps me remember i have transferred the original if i have to go back to it.
This stops me having to split a transaction in the bank and delete the old one, also the transaction still matches the statement and i dont have to ad extra transactions to get the statement to match.
The personal part is accounted for as drawings from DL account, and the business portion is also paid, which leave the remainder (personal) taken from DL account.
I quite often find myself with split receipts, and this was the best and quickest way i could deal with this, also now you can edit transaction descriptions in the banks, so after i go into the bank and edit the description so i know why i originally transferred the full amount and for what
Everything tallies and personal and business spends are kept separate.
That’s sounds great. Many thanks.
