I created a new nominal code for our National Lottery Grant and ticked for invoices to be allocated to this
when i paid some venue hire invoices and i tagged those from the bank as, not on this list, and entered the national lottery grant - however the invoices remain untagged in the purchases. how do I rectify this? what have i done wrong?
thank you
You should simply be tagging the payment to the invoice using the “payment to a supplier” option.
So how then can that expenditure be linked to the grant where you need to show grant monies have been spent according to the grant? confused!!
Project tagging is probably the simplest approach here - all purchases that are related to the grant could be tagged with the same “project” code, then you can easily generate a report listing them all.
If the grant is a custom nominal then you should see all the relevant invoices linked to it on the chart of accounts.
Have you created a “sales” nominal or a purchases one or both? If you create a new nominal in for the expenses, then when you create a purchase invoice, you select this new nominal as the category. This allocates the expense to the new nominal code in the P&L. Then, when you pay the invoice, you tag it as a supplier payment which will not affect the P&L.
Make sure you don’t try and allocate expenses against the same code you put the grant income to.
I created a new nominal code and ticked the add purchases but i am not sure how i add them to the nominal other than tagging from the bank and then it doesn’t show in the P&L
the category when you create a purchase record doesn’t allow you to create a new category, so i am not sure what you mean/ how to
“then when you create a purchase invoice, you select this new nominal as the category”
and also don’t understand “Make sure you don’t try and allocate expenses against the same code you put the grant income to” as when I created this I ticked for invoices as well.
thanks for your help
if it is easier i can create a project but not sure how this shows against the grant as there was no sales invoice for this as it was just a payment. should i have created an invoice? i just tagged it to the new nominal code from the bank
On the left hand side, the category column. Select the lottery grant nominal. 
The grant is income, the expenses are expenses. Your profit & loss needs to show the amount of grant received under the income section and the amount you spent under the purchases or overheads or whatever, e.g.
if you were to use the same nominal code for both the grant received and the expenses spent then when you come to the end of your financial year your books would instead look like
it makes it look like you received less money than you did.
A project tag is the better way to deal with this. Use the normal expense nominal codes on your purchases to reflect what you are actually purchasing, tag purchases that are funded by the grant with that project tag, and add an adjustment to the project to reflect the amount of the grant you received, then the project report will tell you at a glance how much of the grant you have spent and how much remains.
Allocating expenses against income is falsefying accounts at the end of the day. To put it bluntly.
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