Analysis of invoice to codes

I am trying to analyse the different items on a purchase invoice. The coding analysis that shows up does not permit me to post to a balance sheet item (Drawings). Is there any way apart from a journal entry after initial posting that I can analyse correctly at point of entry. I have never come across this problem before despite having used many, many types of accounting software in the past.

Hi @trecar

I’m sorry to hear you’re having difficulties. Are you able to tell us a bit more about your situation and we can advise on how to achieve this within QuickFile?

For example, what are you looking to post to the Drawings account from a purchase invoice? What’s the situation that you’re trying to account for?

A purchase invoice contains a number of items, some of which are personal. In posting the invoice I need to allocate these items to drawings. However, the drop down list of codes does not permit me to. I went to the chart of accounts to allow the code to be included in the list. However, it is locked and will not permit me to do so.

If they are personal expenses, you wouldn’t include them. The drawings account is more for recording payments you make on behalf of the business.

However, if you need to record them, what you could do is create a custom expense code to separate it from the other expenses and journal the balance at year end.

If you’re vat registered be aware that doing it that way means you’d have to (a) set the “net” column to the gross amount on the drawings lines with no VAT (so you’re not claiming input vat you’re not entitled to), and (b) manually adjust box 7 on the return as all purchase totals are included in that by default including these “drawings” ones.

What I do is put the whole purchase through as normal, then once it is paid up I modify it to add a negative line for the personal use items and “refund balance” of the (now over-)payment to drawings. That way the purchase total is only the business related part and I don’t have to adjust box 7. I could add the negative lines up front but that makes the receipt hub and bank tagging a bit more tedious as the amounts don’t match.

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Not sure I understand your response. Traditionally, drawings are items that the owner takes out of the business. Additions to capital being when the owner puts items into the business. If one is to properly control the purchases account then the whole amount of the invoice needs to be posted so that the payment can be properly offset, thus reconciling the purchases control account (or as it was known in my days the bought ledger control). The private items are posted to drawings to ensure that they do not reflect in the P/L account. The drawings account is a balance sheet item and is included in the capital items as an appropriation of profit.

Thanks for your advice. VAT does not operate in this case but I take your point. I have not yet used the VAT element in Quickfile so I am not familiar with how it treats inputs and totals. It’s a moot point as to whether one should worry about the total net purchases column as apart from statistical uses its only other function appears to be to check the accuracy of the return inputs, and of course if the total net purchases is overstated then it will not show up as a need to correct inputs claimed. This identifies one of the unsung advantages of manual records, it is much easier to understand what goes to make up the figures as they are not hidden by an algorithm tucked away in the software.

Apologies if my reply wasn’t clear.

The accounts on QuickFile should only be for business activity, so if it’s a personal transaction you would typically exclude it from your accounts, and then have a matching bank transaction. It would however mean that your bank balance may not match your paper statements.

My colleague outlines this method briefly, here, and our knowledge base article also covers something similar relating to payments here.

The Proprietor Drawings Account is a balance sheet code as it acts like a bank account, typically sits in place of your actual personal bank account. But there is another code to use to correctly show this. My previous post here outlines this. You could use this code directly rather than using the bank account if that makes it easier.

But tagging a line on a purchase invoice directly to drawings, isn’t possible.

I would like to touch on this point - is there anything that’s not visible on QuickFile that you would like to see? Most figures are visible within QuickFile in at least one place - I’m more than happy to point you in the right direction to see these :slight_smile:

Thank you for your clarification. As an accountant I feel nervous about departing from established practice of recording items to show the full extent of a transaction and thus rendering control accounts inaccurate. I have been through too many tax enquiries and full blown investigations where mistakes originating from such practices have caused a great deal of anguish and proved to be very expensive in subsequently trying to establish what happened. I follow the practice that openness in the books tends to allay suspicion of something untoward happening. Now I understand the objectives of the system I am better able to adapt it to meet my needs.