Hi,
I am a sole trader.
I have a business account but I also have a personal account on my bank.
The personal account does not have business into it but sometimes I have needed to use it for a purchase with the visa card associated to that bank account.
So the purchase is tagged to the visa and the visa transfer go to this account.
After that I transfer money from the business account to this account for the same amount to reconcile the account.
To make it easier to manage, I had imported all the movements from my “personal account” into quickfile.
I can tag all the expenses for the business, but I have too many expenses on that account that I cannot set as purchases, as they are not related to the business at all.
What do you suggest to do:
Leave everything without tag. Not sure how will this affect accounting.
Tag everything to another virtual account. Not sure how to do this.
Remove the current account from the “bank accounts” and create it on the “Equity Accounts”. I am not sure I understand the “equity accounts” completely but I think this is for money “out of the business” so maybe the account needs to be there.
I just found that there is a “Suspense Account” with all the non tagged expenses.
Not sure what to do with that and how this affect my accounting as sole trader.
It’s usually best to remove the personal transactions if they’re not related to the business to avoid confusion, however, it’s often down to personal preference on how you actually handle this.
A big positive is that you have a separate business and personal bank account - that will certainly help with a clear trail for HMRC.
Personal transactions should be added to the “Proprietor Drawings Account”, which acts as your personal account. This bank account would have been created for you when you opened your QuickFile account.
The suspense account is just a holding account for anything that the system doesn’t know what to do with - including untagged entries. This will show on your balance sheet, so it’s good idea to ensure the balance is 0 at year end.
This personal account is in EUR, so I needed to create that one because the system only create one in Pounds (which is perfect ;)).
So, what I did is create this two, and maybe this is the bigger problem:
one “Drawings account EUR” on the Equity Accounts.
Another one “Current account in EUR” under bank accounts to keep track of the expenses I made with that VISA when I had no founds on the “business account”. Because that visa goes to the account, I thought it could be good to have that under Bank Accounts.
Maybe I need to fix this, let me know if this makes sense:
remove the “Current account in EUR” under bank accounts.
Everything that was tagged into that account, use the “Drawings account EUR” for that.
This won´t allow me to reconcile that account with my bank completely (because some other things go there too) but I think it will leave the bank account more clean and the balance easier too.
What do you think?
Would be the same to remove all the personal expenses untagged from that and leave the account to 0 and start from 2018 using the drawings? (it would me much easier to do this than remove everything as I have some things tagged already.
Thank you for your help!