Putting through insurance claim - sole trader

Hi all,

I’m new to doing mine and my husbands account so apologies if a silly question.

My husband is a sole trader and recently received money into his business account from his insurer for stolen tools.

How is best to record this on the banking feed?
I don’t currently link his bank so the feed is done manually. Just wondering how is best to add it and then tag it from where.

Thanks I’m advance!

Hi,
I am not an accountant and it would be probably best to speak to one.
But for my understanding, Tools is an asset. So, in your bank account create a money in transaction for the money received from the insurance. If done, click the tagging button and choose something not on the list. Then describe it and choose the asset account ‘tools’ or ‘machinery’ or wherever the tools were first recorded.
You may have to do something with the depreciation (recalculating) if applicable. But as I said I am not an accountant and it is best to seek advice from one.
Sorry, I couldn’t be more helpful

How were the tools recorded in the accounts in the first place? If they were of small value and simply put through as an expense, then the receipt fro the insurer just goes as “other income”. You can add a code specifically for insurance claims if you like, but other income will suffice. When you tag it you just choose “something else not on the list” and then select the relevant nominal code.
If the tools were expensive and recorded as fixed assets, then that’s different. You treat them as a “disposal” and record the insurance money as “proceeds on disposal”. That’s slightly more complicated though :slight_smile:

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