Not sure of the best way to deal with this one. I was doing some work as a freelance for one of my clients, they asked me if i wouldn’t mind taking cash payments from the candidates of the course I was running and pay it into their account (and for me to invoice them as normal). So i am now faced with cash been introduced into the business that I don’t want to show as contributing to the sales of my business. As soon as i paid the amount in I then transferred the cash straight to the clients bank account. Any advice on how to handle this when entering it to the accounting system please. (Oh and yes with hindsight and defiantly for the future I will just get their bank details and pay it directly into their account.)
If the money was never yours to start with then simplest would be to tag the money in to your current account as a transfer from some other account (drawings or directors loan) and then the money out as a transfer back the other way.
If you kept back some of the cash instead of transferring it all to the client and then them transferring money back once you invoice them, then the same thing would apply - tag the cash paid in as a transfer from DL, the amount you send to them as a transfer to DL, and then account for the difference as payment from a customer into DL for your cut of the fees.
Thank you Ian most helpful worked a treat.
Ideally you tag the money in as an “other creditor” as it is money that you owe to a third party. It’s not yours so avoid DLA or drawings.
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