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How do I account for cash sales?

Hi

I have recently set up a franchise gardening services business. Because of the situation with the virus, there were several challenges on setup. One of which was the timeframe of getting the business account sorted. This meant that many setup expenses went straight on my personal account. Many of which (not all) have been logged to quickfile under petty cash.

I had a business loan which has also been recorded on quickfile so this has balanced to some degree.

Could someone tell me -

1 - Should these purchases be logged under petty cash? and if not what should they be?
2 - How do I add initial investment (purchases made through my personal finances) to quickfile?
3 - How do I search for all cash transactions to cross-reference with my bank stats to balance my books?

Many thanks in advance

Hi @Rich_Harris,

You may find this guide will help answer your questions: Sole Trader Bookkeeping - The Basics

Thank you, Beth. I had read through this before posting and was still baffled. I had been advised by the Franchise to place transactions under petty cash. It would seem that in the guide this is not the case. I’m having crossed wire issues as we have done soo much of the business setup via zoom which is not the best for me personally (to old school).

I was after some clarification on this. Namely to ensure that my bookkeeping is balanced correctly.

So am I right in saying that all initial transactions that have been paid from my personal account should be logged as proprietor drawings account not petty cash. Then pay money into the proprietor drawings account to the value of the said transactions?

Hi @Rich_Harris

Petty cash in QuickFile should be used for any cash transactions. So this should represent “cash in hand”. If a customer pays you in cash, the sales would just be tagged as paid from this account rather than your current account for example.

If the purchases were for business purposes and paid for out of your bank account, you would enter the purchases as normal (as a “Purchase invoice”) and tag them as paid from the Proprietor’s Drawings Account.

As above, your cash transactions would be in your “Petty Cash” account. You have a couple set up for you when you join QuickFile (“Petty Cash” included), but also “Current Account”, which should reflect your actual bank balance with your bank (e.g. HSBC, Barclays, Monzo, etc.)

Hope that helps!

Got it. Thank you.

Is it easy enough to change tags on the transactions?

You can just untag them and re-tag them. If you click the green “Tagged” button, you should see that option.

But there may be an easier way - in what way did you want to change them?

All initial transactions were tagged as cash. Not all transactions were logged in quickfile so I need to retag these to proprietor. cross reference with my personal accounts and add any transactions that are missing.

You can re-code them if needed.

If you go to Reports >> Chart of Accounts, and go down to your Assets & Liabilities section, you will see all your bank accounts. Go into the bank account you want to move the transactions from (it sounds like it’s Petty cash in this case).

From there, tick all the transactions you want to move to the new account, and click “Move to new code”:


Select the new code, and job done.

If it’s just a handful, you may prefer to just delete the transaction from Petty Cash, and tag them as paid again, either by manually inputting the transactions into the correct bank account, or by using the “Log Payment” on the invoices - however you feel is easier for you :slight_smile:

Thank you Mathew. Its quite a few, including the initial investment transaction. Makes sense now though cheers.

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