Hi. I am a travel agent and am part of a consortium. When a customer buys a flight from us, we pay for the flight ourselves using our company debit card and then the consortium reimburses us for this cost a couple of weeks later. So for example £1000 out and then back in a fortnight later. We do not want to create a purchase invoice and there isn’t any VAT implication.
On Quickfile should we allocate this to 'something not on this list" and then General Purchases or somewhere else please?
Many thanks
If you want to assign it to General Purchases (so it appears as an expense on your P&L - the reimbursement would then presumably need to be recorded as a sale) then you should do so via a purchase invoice. If you don’t want to record it as an expense then you could just create a fake bank account to track things - your £1000 debit card payment would be tagged as a transfer from your current account to this fake holding account, and the reimbursement from the consortium would be tagged as a transfer the other way. At any given time, the balance on the holding account represents the total amount you’ve paid for but not yet been reimbursed.
Hi Ian. Thanks very much that’s great. I think that I will create a fake bank account. Cheers
Note that I’m not an accountant - you should probably double check with your own accountant whether this arrangement is reasonable (where the consortium is the one actually “buying” the flight, and they’re just using you like a credit card) or whether it needs to show in your accounts as a purchase and re-sale.