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Business and non-Business expenses

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ali.morris

12 Nov, 2014 09:54 AM

Hi folks, I know your basic answer to this is usualy to just keep separate accounts, but it isn't always that simple... One idea that could be to add a field to the account detail giving a percentage of business use - 100% would be totally business and 0% would be personal - this would allow for things like use of home, car use or travel to be done as a percentage of total cost, very handy for us sole traders. I'm sure I am not the only user who would find something like this very useful. Cheers

Ali

1. 1 Posted by ali.morris on 12 Nov, 2014 10:00 AM

   

   I didn't want this to be a private discussion, but can't see how to make it public.

   I'm using the latest versions of your software on both iPhone and Desktop computers

   Cheers.

   Ali

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2. Support Staff 2 Posted by Admin on 12 Nov, 2014 07:09 PM

   

   I'll make the discussion public for you so people can add comments.

   Mathew

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3. 3 Posted by Justin Mihulka on 30 Nov, 2014 10:41 PM

   

   Hi there,
   I am having a similar problem as I use a room in my house to run my business from, my accountant normally tells me to give him a list of my bills and then he would take 20% of them. I have just tonight sat and entered them as a supplier ie. EON energy then worked out 20% of each bill and entered that in as the cost for each month, then manually marked them as paid. It then adds it my profit and loss etc..
   The problem I am not sure about is that it looks like it's not paid as it looks like an outstanding amount on the supplier list?
   Would be good to hear if there is an easy work around for this?

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4. 4 Posted by darren.whelan on 24 Dec, 2014 05:32 PM

   

   Hi Justin,

   Are you using one bank account for both business and personal financial movement?

   Cheers

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5. 5 Posted by Border Photogra... on 24 Dec, 2014 05:53 PM

   

   Hi Darren,
   I just have the one account for all my business expenses.
   However, the electricity, council tax etc all comes out of my personal account.

   Cheers
   Justin

   Sent from my iPhone

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6. 6 Posted by darren.whelan on 24 Dec, 2014 06:50 PM

   

   As your accountant has allowed for 20% tax deductible expenditure on certain items, these values need to be recorded in the P & L. You’ve achieved this by using the Accounts Payable/Purchase Ledger. At this point, it’s correct. However, as you’ve recorded these items through the Purchase/Accounts Payable ledger, the opposite side will be sitting on the Balance Sheet as a creditor/liability to your business. You need to remove this value. This can be done in one of two ways:

   1. Either physically transfer the money from your business account to your personal account for the total 20% value. Then pay these amounts via the supplier account on Easy Books. This will remove the liability on the Balance Sheet or;

   2. if you don’t want the cash to be debited from the business account at present, move the balance to a Capital Account. This again, will remove the liability from trade creditors but will credit a capital account for you to be reimbursed at a later date. When you physically want to reimburse yourself for these values at a later date, you will need to record a payment, selecting the Capital Account which will return it to zero.

   Either way, from a personal perspective, your business owes you money on a personal level and the Balance Sheet needs to reflect that.

   If you choose option 2, give me a shout and I can talk you through it.

   Going forward, it might be easier not to use supplier accounts for these types of expenditure. It may be easier just to either record a payment to your bank and expense nominal account direct (so longs as you move the money from your business account to personal account at the same time) or a record a journal from the expense nominal account to a capital account to be reimbursed at a later date. That’s how I’d do it. Double entry would be:

   Reimbursement from business account to personal account

   DR Expense Nominal i.e. Room rent etc
   CR Bank

   Or to be reimbursed later:

   DR Expense Nominal i.e. Room rent etc
   CR Capital Account

   Darren Whelan
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7. 7 Posted by Justin Mihulka on 06 Jan, 2015 11:36 AM

   

   Hi Darren,

   Thank you for getting back to me with such a detailed reply.

   I hope you have had a nice Xmas and New Year!

   I think to fix this at the moment I will need to go through option 2, so if you could talk through that, it would be much apprecaited.

   Going forward , i will take your advice and put it through as

   > DR Expense Nominal i.e. Room rent etc
   > CR Capital Account
   >

   So it can be credited at a later date, would i just have a line in indirect expenses i.e. Room rent.. and then do a credit to the same value in the Capital account?

   Cheers again for you help.

   Thanks

   Justin.

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8. Admin closed this discussion on 08 Mar, 2015 11:17 AM.

9. ali.morris re-opened this discussion on 19 Jun, 2015 12:29 PM

10. 8 Posted by ali.morris on 19 Jun, 2015 12:29 PM

    

    Hi Darren

    That seems like an awful lot of faffing around to do for every single item that isn't 100% work related. For those of us that aren't a limited company or have fairly basic accounts some kind of option would be very handy. I have all my bank accounts and credit cards in my system which is very useful so being able to mark them as work or not would be fantastic.

    Also, any chance of a better invoice editor?

    Cheers

    Ali.

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11. Admin closed this discussion on 01 Dec, 2015 07:56 AM.