I’m using quickfile to manage my small limited company finances. So far I’m impressed!
As a very small business (I have reasons for choosing limited, though), I am unable to afford an accountant sadly, but I’ve learned quite a bit about the general accounting of a limited company!
A question though. When I purchase items to be sold on to my clients, for example, as a network engineer, I buy in equipment to sell on to my client, often with a very small/no profit, where do I put it? I’ve read on here that general purchases is the right place to put it, but I saw the stock tag, so surely that’s more appropriate?
General purchases is fine if you are just buying materials for jobs and then supplying them to customers. IANAA but AFAIAA tagging purchases as stock logs them against a different nominal code so they show up as company assets on your reports.
So, when I’m purchasing to fulfil a purchase order, or as part of a job, I should use general purchases, but if I’m stocking items before hand, I should use stock, so that it becomes an asset in the reports? I assume that anything I purchase but don’t supply to a customer is an asset.
You don’t need to worry too much about the stock codes for your day-to-day accounts, “general purchase” is fine. Stock is a balance sheet code so when used it will show as asset. Unless you’re holding significant quantities of stock, you can just report any stock balances at the year-end.
“General Purchases” is a catch-all code, but if you want you can create your own that’s fine. This is useful if it’s important for you to breakdown your expenditure.