Please can you tell me how to setup and use a nominal account which I can post to in sales invoices and purchase invoices to the same account, so that I can enter a purchase invoice to this account and then produce a sales invoice to the same nominal account, thanks
Hello @gillianf
Purchases and sales would be to separate accounts to affect the correct area of your chart or accounts.
Could you provide more information about what you are trying to do?
Hi Steve,
I have a receipt for my husbands expenses, in this case entertainment which I then invoice to another company, so I want the purchase and the sale to go to the same nominal account
Regards
Gillian
I would check with your accountant on this - my (non-accountant) understanding is that the expenses he incurred belong on an expense code and the amount you are charging to the client belongs on an income code so it shows as part of your turnover in P&L. The net result is the same overall profit, but the recharged expenses are part of your turnover - and yes, this may push you over the VAT threshold if you’re not already there.
Hi,
I understand what you are saying but the sale is not part of our turnover. The ‘purchase’ expense is not ours, it is an expense for the company we are charging, therefore I need an account I can do a contra in so that the expense comes in but then goes out.
Regards,
Gillian
What is a contra expense in accounting?
What is a Contra Expense? A contra expense is an account in the general ledger that is paired with and offsets a specific expense account. The account is typically used when a company initially pays for an expense item, and is then reimbursed by a third party for some or all of this initial outlay. Regards, Gillian
The question is who gets the benefit of the purchase. You talk about “my husbands expenses, in this case entertainment” - if he is procuring entertainment services from a third party to entertain employees of the client company then yes, I guess that would be reasonable to treat as a contra expense, as the client is reimbursing you for services that you purchased on their behalf for them to benefit from. But if it is your husband being entertained during a business trip then that would be a re-charged cost, where he incurred a cost for his own business which you choose to recoup by adding it to what you’re charging the client company.
If it is a genuine contra situation then to answer the original question, you can’t do contra expenses with the default nominal accounts in QuickFile but if you create a custom nominal in your chart of accounts then there is a tickbox to allow it to be used in the “other” type of invoices (i.e. if you create a code in the sales range you can tick to also allow it to be used on purchases, if you create a code under purchases/expenses/overheads then you can tick to also allow it to be used on sales).
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