Sole trader - how do I tag purchases paid by me?

I have just set up a new business and I’m totally new to accountancy.
I am trading as a sole trader in the UK and have not yet made any money, but spent quite a lot of my own money.
When I attach receipts for equipment etc to quick file I mark it as coming from petty cash, is that correct as it is my own money?

Thank you for your help.

Hi @jkeep123

Welcome to QuickFile! :slight_smile:

I would treat Petty Cash as your literal cash in the business. With sole traders, there’s an account called “Proprietor’s Drawings Account”. This is there to be your own personal bank account.

So, if you were to pay for something out of your own money from a personal bank account, or on a personal credit card, you would mark it as paid from this account.

We have a “bookkeeping basics” guide for sole trader accounts, which can be found here: Sole Trader Bookkeeping - The Basics.

Hope that helps, but any questions - please don’t hesitate to let us know. We’re here to help!

Many thanks for the reply, Mathew I will look at that and do as you suggest and also look at the link you sent me.
Many thanks,

Jeff.

Hi Mathew,

I have been going through quick file and getting used to it and have looked at your soul trader, book keeping the basics which was very informative.

I have a question you may be able to answer before I put it on the forum.
It may sound a bit stupid but I’m new to this and I am aware that if you get your bookkeeping correct from the start it will make my things easier.

It is my wife’s business am just doing the accounts for her. She is a stay at home mum only getting child benefit and no other income.

She has bought about £700 worth of equipment towards the end of March which I have logged in the quickfile but I have put it as unpaid and was going to pay it on the 6th of April.
Therefore starting the tax year off with paying £700 worth of equipment and not having to do a separate self assessment for 23/24 of £700.

I hope I have explained myself clearly and if I am doing the right thing to start the business accounts for 24/25.

Also, does she have to inform the HMRC that she is now a soul trader, or does she ust have to fill out to self-assessment at the end of the tax year

Kindest Regards for your help,

Jeff

Hi @jkeep123

Apologies for the delayed reply.

No need to apologise for the questions - we’re here to help!

QuickFile is set up on accrual accounting, so it’s the date of the invoice that matters rather than when it’s paid. However, we do have a cash based profit and loss account available to sole traders and partnerships who have a subscription with us.

On accrual basis, this would fall into March as the purchase date was in March. Whether this can be changed or not, I think, would be a question better aimed at an accountant.

We do have some on our forum who may see your post, but if you’re stuck, we have a directory of accountants you could contact - https://accountants.quickfile.co.uk.

Just a note - As your original post was a public thread and you’ve replied to the email notification for it, your last post was also put on the public thread (here). If you want this changed, please let me know.

Thank you so much for your time and patients.
It is so greatly appreciated.
I don’t mind it going on a tread.

Kind regards,

Jeff

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