Journals help for cash business

My Accounts are on a trusty spreadsheet but playing around with quickfile to to see if I will migrate. As a cash business I have to record my till receipts as sales. All good. These are deposited into Petty Cash by the system ok… Of course I want them to show in the current account. Managed to transfer with a journal but the argument seems reversed I.E. Debit Current Account , credit petty cash ??? logically the argument should be debit petty cash. Checked that this did not affect anything else I.E. Sales calculations, VAT Return etc the money has simply moved accounts as I wished . Am I going about this the right way ? These systems are all well and good but the potential for getting your knickers in a right twist are high. I have to say though quickfile seems the most intuitive of all I’ve trialled and that includes all the big names.

Hello @Keepitsimple

Firstly, thank you for your positive feedback! That’s certainly good to hear!

With sales you would need to record them as an invoice rather than creating a journal for them. Journals aren’t included in VAT return calculations, which is perhaps where there’s a bit of confusion.

Although you’re not issuing an invoice as such, all income would be recorded as an invoice in QuickFile. But, there’s perhaps a quicker way of doing it than that. We have a built-in tool called “Cash Register”. This allows you to enter totals for a period (e.g. a day) and it’ll automatically create the invoice and associated payment records (for cash and card). There’s more information on this here: Cash Register Tool

I hope that helps, but please don’t hesitate to let me know if you have any further questions.

Thank you for your reply,Yes , the cash register is how i’m entering the till receipts … so all good there , I also noticed that it creates and invoice for each transaction. It files these in petty cash but appears not to take any calculations from there ? The system is either looking at invoices or a straight total sales calc. All of which is fine and from what I can tell everything is calculating ok inc. VAT. What I want to know is : I need that money in petty cash to be in my current account if I’m to do bank reconciliation. i have used a journal to transfer that money , is this ok ? As I said though the argument in journal does seem back to front but works .

*** files amounts in petty cash

The petty cash “bank” account in QuickFile just represents cash you’ve received from customers but not yet taken to the bank - when you do bank cash the “money in” on your current account can just be tagged as a transfer from the petty cash account, it’s not payment from customers as that’s already been dealt with by the cash register tool.

Thank you for the reply, I understand this, transfer is auto tagged anyway, Am i transferring the payments from petty cash in the correct way i.E. by the journal.

You shouldn’t need to use any journals for this. The cash register tool will create an invoice, and payment(s) into the petty cash account (and possibly card holding account too if you take cards) to make that invoice paid in full.

When you deposit cash at the bank you’ll have a “money in” transaction appear on your bank feed if you’re using one, or if you aren’t using a feed then you would add the transaction manually using the + Input New Transaction button at the top of the current account page, and when this transaction appears you can tag it as a “transfer between accounts” and choose petty cash as the source account.

(Similarly, if you take cards then when you receive money from the card provider into your current account you would tag the money in there as a transfer from your card holding account.)

P.S. regarding credit and debit being “reversed” for bank accounts, this is actually correct in accounting terms - “money in” on a bank account is debit and “money out” is credit. This feels wrong if you’re used to reading the statement that the bank sends to you but remember that that document is the view from the other side - it’s the bank’s view of you rather than your view of the bank.

The way I think about it is to visualise credits and debits as movements of money, with “credit” being where the money comes from and “debit” being where it goes to. When you spend money from your current account on buying some widgets, say, then in your books that is money going from the bank (credit) and to general purchases (debit1). However the bank’s view of that same transaction is that money moves from their big-pile-of-cash-in-the-bank-vault (credit) and goes to you (so it shows as a debit on the statement they send to you).


1 This is an over-simplification for the purpose of this example, there’s actually another level of indirection in real life via the creditors control account.

Thank you Ian, yes forgot about the way banks do things . Misdirection may be a better word given that paper money is fiat and is in fact debt created from nothing via fractional reserve lending … but that conversation would need several pints in the pub!
Im not sure to what extent I will use quickbooks at the moment I.E. Bank reconciliation etc. I used paper books and spreadsheets which have served me well and besides I run a cafe which is uncomplicated really. MTD is forcing me to validate these systems , I could of course just go down the bridging route. Thanks again

OOps quickfile and Ive not even had a pint !

I run a retail shop and I have used QuickFile from day one. I record one “invoice” for each Z read from my till (I don’t actually use the cash register tool as I started up before that tool was available but I record things the same way, one invoice per day with part payments for cash and card). I record all my purchases with scanned or emailed receipts via the receipt hub, logging cash payments directly through the receipt hub “paid” checkbox and bank payments (BACS or card) via the feed. I generate journals for staff wages from my payroll software, and I’ve done all my VAT returns via QuickFile both before and since the start of MTD.

Well there’s another thing, as I’m on flat rate I don’t need to keep digital copies of my purchase invoices as I can’t claim VAT back except for capital items over £2000 inc VAT nor do I need to record DGT as that applies to retail scheme . I like the product but don’t need a lot of the functionality . Still a while before the VAT return is due so will evaluate.

Hi @Keepitsimple

I would highly recommend keeping copies of the invoices you receive as part of your business expenses. HMRC can request to see these.

Digital copies are not necessary I will of course keep the paper which incidentally is not required , good old government systems ;(

Hi Ian ,

As an obvious power user , do you know if you can look up your next submission date after a given return ? I’m sure I saw something like this but it may of been some other software I’ve looked . I.E. it polls HMRC makes the return and then HMRC poll back your next return period and dates etc.

Matthew,
To clarify, as i don’t think I was clear . The gov.uk docs state you should keep paper invoices in general as I’m sure we all do or did. BUT if your keeping your purchase invoices digitally then you do not need to keep paper copies , which is risky if you ask me. There is very little digital record keeping requirements for flat rate scheme , it is in reality a digital VAT account and thats about it. Hence my reticent in going wholly digital along with some other concerns.

Thanks Darren

Hi Darren,

I understand your situation. If you keep digital copies, there’s no need to keep the paper copies providing they are accurate. However, you should keep records of any money spent or received by the business, along with other documents.

If you have any concerns about keeping digital records within QuickFile, please don’t hesitate to contact me (privately if you prefer), and I will try my best to assist you further.

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