Sole Trader trying to clear up my suspense account

Good morning. I was wondering if you could help me better understand this with regards to bank tagging.

  1. I make a work purchase from the business account and tag it to an invoice - all good!

  2. I make a non work related purchase from the business account. That’s now sitting in my suspense account. How do I tag that to clear it?

  3. I get a credit note from a supplier for faulty goods. Do I just tag that as a payment?

  4. I introduce my own money into the business account from another account

Any/All help greatly appreciated

Thank you

Hi @InfernalMachine

Point 2:

How you handle this would depend on whether you are a limited company or a sole trader. If you’re a limited company, you can tag the payment as a transfer between accounts to the Directors Loan Account. If you’re a sole trader, you tag is as a payment between accounts to the Proprietor Drawings Account.

For more information about both of these, check out the following:

Point 3:

How you handle this depends on the circumstances of the credit note, so I’ll leave you with the link to the generic credit note help page: Managing credit notes

Point 4:

Introducing capital to your business can be handled in the same way as making personal payments from the business. Tag the payment as a transfer from either the Directors Loan Account or the Proprietors Drawings Account.

I hope this has helped, but if you have any further questions, please don’t hesitate to reach out.