I use Starling Bank for my company and they give you the option to set money aside in a section called Spaces also known as Goals.
The money still stays with Starling in the same account but is deducted from the balance and available funds.
I have set up one “Goal” called VAT where I add money for tax returns. When I need to use this money, I then select withdraw and place the desired amount back into my available funds.
I was wondering what I should do with regards to my accounting to account for this?
When I check my balance on Starling compared to the balance on Quickfile, there is a higher balance shown on here which equals the available funds + “Goals” total.
Hopefully that makes sence to those reading…
So I suppose what I am asking, is, should I set up a different account to account for the “Goals” section? I was unsure what to do as technically I am not moving money out of the account, the money starys there but is not available to spend.
You are correct in saying that setting up another account on QuickFile would work for this. You could treat it as a savings account that shows the money being transferred from your Current Account into the Goal. This should keep your Current Account balance in line with what is shown in the Starling App.
It’s worth bearing in mind though, that the balance on QuickFile will reflect the Statement on Starling. When you move money into a Goal on Starling, this isn’t reflected in the Statement, only on the “available Balance” in the App. If you are then going to try reconciling your QuickFile Account using the Statement, you may find that the totals don’t tally because of the money in the other QuickFile Goal Account.
I hope this helps, but if you have any further questions, please don’t hesitate to ask.
Thank you for your reply.
I think its a sort of grey area where both leaving as is or setting up a new accounts would have both benefits and draw backs.
As were a small company, probably best leaving as is at the moment. as its not making too much of a difference to us. Just really wanted to make sure that for book keeping, I was following best practices.