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Unable to create journal for DLA expenses for last year

I started using QuickFile at the start of my FY in April 2019. One of the first bank transactions was a repayment to the director for mileage in a private car over the previous year - it has been sitting as an untagged bank transaction all year.

I created a purchase using the travelling code to cover the amount (dated 30 Mar 2019) and marked it as paid by bank transfer on 6 Apr 2019.

How do I tag that transaction so that it doesn’t show up in this years accounts? I tried using an auto-reversing journal but those travelling expenses still show up in this year’s P&L.

like this:

I tried to tag the bank transaction to link it to the purchase but it doesn’t seem to be possible - maybe it’s because it’s more than 6 months ago? I also tried having the purchase marked as not paid but that didn’t help either.

As you can tell, I am confused about how to proceed.

Any simple advice for a very-non-accountant welcomed!

You cant create a journal that doesn’t balance that’s your first issue.

2nd is I’m not sure you should have created a purchase. There wasn’t one was there? Who did you pay? No one.

You paid the purchase using bank transfer. Did the money actually come out your account or not? If not then how does you bank balance match your statement if you’ve added a transaction that was never there?

All you needed was the journal to apply the mileage claim to the dla.

@Paul_Courtier
Thanks very much for your reply.

You cant create a journal that doesn’t balance that’s your first issue.

What doesn’t balance about it? It has the same amount on the debit and credit sides. I assume you mean something more complicated than that?

I’m not sure you should have created a purchase. There wasn’t one was there? Who did you pay? No one

I was following the guidance in this link: https://community.quickfile.co.uk/t/limited-company-bookkeeping-the-basics/8809#2 and specifically this advice from @Glenn https://community.quickfile.co.uk/t/do-we-need-director-loan-accounts-for-director-expenses/5821/8?u=magicbean that suggested keeping all the mileage in an itemised purchase.
I don’t have any special reason, I just want it to be simple!

You paid the purchase using bank transfer. Did the money actually come out your account or not?

Yes - on 6th April 2019.

All you needed was the journal to apply the mileage claim to the dla.

OK, so I have done the following:

  • Deleted the purchase
  • Created a Journal to debit Travelling and credit DLA on 30 March 2019 and which auto-reverses on 6 April.
  • Tagged the bank transfer by posting to DLA.

Now it seems to be OK, the DLA appears neutral, last year’s travel doesn’t show up in this year’s P&L and the bank item is tagged.

Is that the right combination?

Thanks.

What came out the bank on 6th April? What went in was a reimbursement of mileage used in your own car. So you just tag the payment to the dla and mark it mileage reinburstment and if you like just add a note regarding how many miles and at what rate.

The guidance in my opinion is wrong for mileage claims. That’s something for quickfile to discuss but personally it’s an allowance not an expense for the purposes of suppliers.

The journal not balancing is this one

But I think you have fixed it now so it doesn’t really matter.

I take your point about the journal not balancing; thanks for helping to fix that.

What came out the bank on 6th April?

This did:

I don’t really follow why that isn’t money ‘coming out of the bank’ to reimburse the director. Unless you thought I was referring to the directors personal account; I meant the company bank account. However, tagging it to DLA and marking it as business miles for that year is clear enough for me and I find the method less confusing than raising a purchase for it.

Thanks for your help - much appreciated :grinning:

I was just wondering why you have used a reversing journal? This will take the mileage costs out again and make the balance on the DLA wrong.

As the costs relate to the prior year, presumably they were already included in the previous year’s accounts? In which case they should be in the opening balance of the DLA. The bank payment should then just be tagged to the DLA with no need for any P&L entries.

Going forward, if you raise a journal to debit travel expenses and credit DLA, then tag the payment to DLA, everything should balance out.

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