Hi, I am setting up a set of accounts on SAGE 50 from scratch for a new business. My problem is my client has used different (2 x personal) bank accounts to make payments for various set up expenses such as computers office equipment etc etc. The business bank account was not used until 3 - 4 months later for other purchases. My client is VAT registered and wants to claim VAT on the earlier purchases so I will post each of the payments on the applicable nominal accounts (for the VAT return calcs) but do I need set up a SAGE bank account for each of the non business bank accounts in order to record the payment? Or is there another way I should do it?
I wouldn't set up 2 bank accounts if they are personal ones and not likely to be used again for business purchases.
For clients that make business purchases with personal money I would either set up an account within the bank dept called for instance personal funds and post the expenses there and then at month end journal them out to drawings/directors loan or journal in the expenditure debiting the expenses account and crediting capital introduced.
Thanks Angela I have followed your first option and in addition I have debited the Purchase Tax Control account which accounts for the VAT for the VAT return
