I’ve just starting using QF as a sole trader and I’m using my personal current account for all money in and out and it’s all mixed in with my personal transactions. I know it’s not great, but my income is currently so low it’s not worth paying for a separate account.
So, I import my statement each month and delete all the personal transactions and tag all the business transactions. All fine.
What do I do with the partial ones? e.g. my sky bill is partially broadband, partially business calls, partially, personal calls, and partially TV. When I hit the ‘Tag me’ button, I don’t seem to be able to split them.
Normally you would just enter the partial amounts on your Quick File bank statement. Ideally you should open a separate bank account for business expenses and keep it completely separate.
Opening a separate bank account wouldn’t help Ben with his Sky transactions. He still gets billed by Sky for a service which is part-business and part-personal. If he recorded those expenses from a business account he would still have the same problem. As there is no way of splitting transactions in Quickfile as far as I can see, there are only two work-arounds I have been able to come up with. The first is to enter the transaction manually with the amount you want to apply for business use and delete the transaction entry for the full amount. The problem with this method is it would mess up any bank account reconciliation. The next method, which is the one I am going to use is create a new nominal account category and call it something like Sky (or whatever), enter the full amount of the transaction and tag it to the Sky category. At the end of the tax year when you are ready to do your tax return, let Quickfile generate a Profit and Loss report, which will be incorrect as it would now include part business, part personal transactions. From this report, import into a spreadsheet and mark all the nominal account categories with a personal element, then apply a percentage to these. For example, let’s say your Sky nominal account figure is £800, apply a multipler of 0.50 (to represent 50% personal use) or whatever percentage you believe is fair and which can be justified to the tax man and generate your own (corrected) profit and loss report. If anyone has a better solution I’d love to know. Ideally, Quickfile should handle this problem itself bearing in mind that so many small businesses will have some mixed private and business transactions.