The Book-keepers Forum (BKF)

Post Info TOPIC: owner paying with cash


Member

Status: Offline
Posts: 8
Date:
owner paying with cash


Hi Everyone, 

I hope you are all well. 

My client ( a sole trader) paid for a small business expense out of his own pocket. 

I have an invoice with input vat that I would like to claim. 

In sage 50 I have recorded with invoice in the supplier account. 

How do I pay this supplier to reflect the payment. (ie I cannot pay with the business account in sage as it did not come out of the account and will reflect my bank rec.)

As the client is a sole trader and not a limited company my understanding is that going down the loan road is not an option?. 

Possibly a drawings journal but how will i pay it on sage?

Thanks in advance

Paul 

 



__________________
Paul Rafferty


Master Book-keeper

Status: Offline
Posts: 8646
Date:

Hi Paul
Did you sort you mlr and PII per your last post?

I only ask as you didnt come back on anything commented back by Doug and I so wasnt sure if you had seen it and we do like a thank you, bog orf or some kind of acknowledgement before responding to further questions. www.book-keepers.org.uk/t66477131/hello/



-- Edited by Cheshire on Thursday 30th of April 2020 12:08:39 PM

__________________

 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position



Master Book-keeper

Status: Offline
Posts: 8646
Date:

What sage (version and type)?



__________________

 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position



Member

Status: Offline
Posts: 8
Date:

Hi Chesire

Its a sage line 50.

I will be honest. I find some of the posts away over my head and I feel that i am not qualifed to respond and give any advice to anyone. 

Sorry 



__________________
Paul Rafferty


Master Book-keeper

Status: Offline
Posts: 8646
Date:

Hi Paul
I mean more about acknowledging when someone has responded to your question/posts! Sorry its a real bug bear of mine. I even started a 'thank you campaign' on the back if it.....twice.

But as you mention some of the other posts - feel free to join in with the time out ones, some are a great de-stresser. To be honest the technical ones, if you read them, will probably teach you more in 6months than you learnt on a course.

Ok to sage....

__________________

 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position



Member

Status: Offline
Posts: 8
Date:

Hi 

No I have not made any more progress. I am currently working for a small sole trader. 

I did go to the link suggested and reading the comments my conclusion is that most people did not recommend starting up a book keeping company. 

I am wondering if the mlr and the insurance is worth buying. The easier option seems to look for something full time in industry. 

Thanks for any advice given. 

Paul 



__________________
Paul Rafferty


Member

Status: Offline
Posts: 8
Date:

Point taken. This is mt 1st forum . Thanks for advice. 

 



__________________
Paul Rafferty


Master Book-keeper

Status: Offline
Posts: 8646
Date:

There is a nifty bit of kit in sage that you might not have come across - its called the practice module. It really great for trying new things out on it, as you can do whatever you want and it will not mess up your main data. It should pop up when you start to log on....unless for some reason you/someone else has switched it off. Failing that Go to 'file ---> open---> practice module.

The other thing worth mentioning is always do regular backups. Do double backups and ensure the back up can be restored. Ive seen people go up in flames and burn when they dont.

So - always do a backup before you key anything new, that way if you fudge it up you can easily unravel it.

You havent said what version of sage you are on, which would be useful as some things you can do on one sage you cannot do on another. Also something you can do on Sage professional you cannot do on sage 50 standard. So its always good to get the specifics.

Generally you cannot journal to clear the debtors/creditors. Do the backups and try it.

So there is a workaround.

Set up a dummy bank for the sole trader - literally call it a 'dummy Fred Bloggs bank' - then key a supplier payment to the supplier account, via that dummy. (Just as you would through the normal bank). That clears the creditor off.

That dummy bank account is now overdrawn. So do a 'Bank receipt' - code it to the drawings account and ensure you T9 it....that way it will show that the owner has paid for the item himself.  You T9 it because the VAT has already been dealt with via the original invoice. (Make sure he gets proper VAT invoices addressed to the business name and encourage him to use a business debit card in future).

You can reconcile this dummy account as usual. Should rec to nil.

Hope that makes sense.

Back up (blur blur blur), try it and check all your appropriate accounts to see how they show after each part of the transaction.

 

edited as was forgetting that it was a supplier and not a customer whilst typing!!!!!!! I need sleep!wink



-- Edited by Cheshire on Thursday 30th of April 2020 12:37:08 PM

__________________

 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position



Master Book-keeper

Status: Offline
Posts: 8646
Date:

Paulraff wrote:

Hi 

No I have not made any more progress. I am currently working for a small sole trader. 

I did go to the link suggested and reading the comments my conclusion is that most people did not recommend starting up a book keeping company. 

I am wondering if the mlr and the insurance is worth buying. The easier option seems to look for something full time in industry. 

Thanks for any advice given. 

Paul 


 You would only need the MLR and PII if you take on clients of your own.  If you are an employee you dont need either.    MLR is blithering expensive - £300 pa with HMRC in year 2 onwards, in year one you have to pay extra, plus an approval fee, so its cost prohibitive (but an imprisonable offence for trading without it!)

Industry or practice will certainly get you more technical knowledge before you launch yourself on to the public. Or they launch themselves on to you. 

 



__________________

 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position



Member

Status: Offline
Posts: 8
Date:

Hi Joanne, 

Thank you for your reply. Regarding the sage, its sage line 50 essentials. Version 26.2.139.0. It's only supports one client. There are things that cannot be done which I would prefer it could.. As the company is small I use sage business cloud payroll which is only like 8 pounds per month. I cannot link the version of sage I have to this payroll so I enter the payroll each term with journal entries. 

Your reply made perfect sense. I kind of was thinking about another personal bank account (when I started in this company the owner was paying everything from his personal account and receiving income through this! Nightmare.) He had recently begun trading and was in the process of opening a business bank account. 

Regarding the practice mode I did not know it even existed!. I could of done with it in college. I was constantly restoring back ups in the early days at college, losing some work in the process and having to do it again. Thankfully i find this version of sage very user friendly and have no trouble using it (so far!). 

Regarding the future I am still at that crossroads... There is some accounts assistants roles that has become available in the local area. At the moment I work around 15 hours per week for this employer. It was very convenient for picking my kids up from school but we were just living week to week. As the kids are now off I am thinking of making the jump. What you were saying about the mlr...I totally agree. It is expensive with hmrc. I think i saw one of the book keeping institutes (maybe ICB) where offering 199. Maybe I am wrong. 

Thanks again 

Paul 



__________________
Paul Rafferty


Master Book-keeper

Status: Offline
Posts: 8646
Date:

Hi Paul
Sage essentials is not a bad bit of kit for the price.

I dont like the fact that you cannot save journals in it (or if you can Ive missed it!). Saving journals isuseful for things like payroll, because you just create a template and then change the date and amounts each time your process it. BUT, as someone who is relatively new to the role, having to think about the processing of such each time is a great way of getting used to thinking about the information you are inputting for such. That said, you could create a reminder template just in excel or some such - Ive done this for a client who never journalled for the payroll, just keyed the payments, but is happily now doing it.

The accounts assistant roles should not require you to have MLR and PII - IF they are employee roles, as you have now. You might be able to do a few part time roles around each other, most employers are flexible on such I find. Then you dont have the cost of the covre as mentioned, nor of the software etc and not having to do your own tax returns.

If however you want to take on the clients so you are self employed, you could look at a couple of options.

Look at the small business reduction option for starting your business. You still have to pay the initial registration fee, but will get a reduction on the main MLR fee if your turnover is under £5000
www.gov.uk/guidance/money-laundering-regulations-registration-fees

Or see what exemptions you get for your current exams from AAT. Ive not checked for you (sorry no time), but start here www.aat.org.uk/aat-qualifications-and-courses/exemptions-for-aat-qualifications

Failing that, try the IAB www.iab.org.uk/

Good luck with whatever you decide and hopefully we will see you on here more, with some of the daft stuff as well. When I first started using the site, I always tried to answer the questions posed in my head, even if I didnt post especially on the technical posts - its a great way to learn as the Qs are so varied, so can do nothing but help your career.

__________________

 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position

Page 1 of 1  sorted by
 
Quick Reply

Please log in to post quick replies.

Tweet this page Post to Digg Post to Del.icio.us
Members Login
Username 
 
Password 
    Remember Me  
©2007-2024 The Book-keepers Forum (BKF). All Rights Reserved. The Book-keepers Forum (BKF) is a trading division of Bookcert Ltd. Registered in England Company Number 05782923. 2 Laurel House, 1 Station Rd, Worle, Weston-super-Mare, North Somerset, BS22 6AR, United Kingdom. The Book-keepers Forum and BKF are trademarks of Bookcert Ltd. This forum is a discussion forum only. There will usually be more than one opinion to any question and any posting should not be viewed as a definitive solution. No responsibility for loss occasioned to any person acting or refraining from action as a result of any posting on this site is accepted by the contributors or The Book-keepers Forum. In all cases, appropriate professional advice should be sought before making a decision. We reserve the right to remove any postings which are offensive, libellous, self-promoting or engaged in covert marketing. We will not notify users of removals. The views expressed in the forum posts are those of the individual and do not necessary reflect or agree with those of The Book-keepers Forum. Any offensive or unsuitable posts will be removed by the moderators. Any reader of this forum can request for a post to be looked into by sending an email to: bookcertltd@gmail.com.

Privacy & Cookie Policy  About