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Which things need to be linked to an invoice, which to a journal, and which only need to be tagged with a code?

I’ve imported my banking transactions, and am going through them, tagging them.

Which things need to be linked to an invoice, which to a journal, and which only need to be tagged with a code?

Is it correct that journals are needed for salary, and other related charges (pensions, PAYE tax and NI payments to HMRC)? Are they meant for anything else?

Which things should use “Payment to a supplier” and which “Something else not on this list”? - What counts as a supplier? (E.g. if I pay for Sage payroll software, which should I be using? - It’s a direct debit, but they do email me an invoice each month).

If they email you an invoice each month, you have your answer.

Someone else may expand on the answer you need but it’s quite a big answer to explain.

You are right about wages, things that don’t get invoiced for tend to use a journal or something else not on this list. That’s not to say something you haven’t received an invoice for, it literally means things that are not invoiced such as salaries.

Journals can be used for a variety of things but I would not advise you use it other than to tag drawings or directors loans. I’d leave any nominal movements using journals to a professional.


So things I get an invoice for (no matter what those things are) should be “Payment to a supplier”.

What about things that are bills but I don’t receive an invoice for? For example, topping up the business mobile phone - I do not get an invoice from them. I just get an ‘order summary’ email. Or I bought some software, for which I was emailed something like a receipt, but not an invoice. Are both of those “Something else not on this list”?

What are “nominal movements”? (Google was not enlightening)

When you top up your phone, even if you don’t get a receipt. Still create a supplier invoice. If I went in to the shop and bought a £20 top up, the person serving me would give me a receipt, right?

A receipt is still an invoice. Your thinking in the sense of an A4 peice of paper with invoice written on it. For the sake of quickfile a receipt is still a supplier invoice.

Things that you don’t get an invoice for, are costs to the business but are not purchases. Wages would be one of those. You don’t issue a receipt when you pay your staff.

Nominal movements are when you use a journal to enter a credit or debit in a category like when you record salaries.

If you don’t know what this is, then I’d respectfully seek an accountant to explain it to you. Because you may end up doing something wrong which costs you in the long run.
I’d also ask or search online for more guidence as to how you record purchases and how you record direct costs