Another quick question. I am using VT Cashbook and entering expenses that a self employed business owner has paid for herself. Even though she is now working, her outgoings are still looking to be the same or if not more than her income.
Is the easiest way to show this to set up a Capital Account as a bank account and put all the expenses under it. Take out any earnings as drawings and then when her business bank account is set up, start using this to pay out expenses and do a bank rec as normal?
Thanks again. I am having a real brain wobble and have been sat staring at/playing about with VT for about an hour. I really want to get this all done and dusted today as I am going to be super busy for the next two weeks.
It would depend on how you have things set up but what i have done in this situation, is create a special CTX payment type called proprietor payments, which is linked to Capital Introduced account. Any payments that go though this automatically update capital introduced.
I pay into the petty cash account (I renamed it sales receipts) and pay all income into regardless if it cash or cheque. Then if any money is removed from the business for personal use (like keeping cash sales) I pay out of that account to drawings.
Sorry, you lost me a little, what you said makes sense to me but how did you create the special payment type in VT Cashbook. Just been playing around with it and not sure?
Sorry I made a slight error, didn't realise Cash Book doesn't have the custom payment option.
The other option is to create a new bank account for payments and use that for all outgoings your client pays for out of her pocket, then at the end of the month, (or year) make a payment out to the capital introduced account to empty the bank account and show how much capital has been introduced.
You could use one account for paying and receiving but if you have two seperate ones it is easier to see whats happening at the end of the month/ year
Bill
-- Edited by Wella on Monday 19th of July 2010 09:52:54 AM
Let's say you open up VT, click display any account, click capital a/c on the left, capital introduced on the righ, click ok, it gives you the screen for capital introduced a/c. On the bottom of the page you find ctx, click on this(not the arrow next to it but the actual ctx) it gives you a new window and on this one you find create new a/c, this will be linked to your capital introduced a/c.
Hope it answers your question and makes sense as well...
Not sure if there is any advantage to using it in this situation though, as it's easier to click the make payment button and use a psuedo bank account, rather than keep opening the account, making a payment on account, entering the details then matching the prepayment.
In Transactions the CTX button (custom transaction button) is on the tool bar which you select to make a payment which is automatically linked to an account type(Petty Cash and Credit Card are built in and user defined can be created). Unfortunately, I cant find this option in Cash Book
The other option is to just journal between capital introduced and the appropriate ledger account but I think it is tidier and easier to trace in a seperate bank account . Bill
-- Edited by Wella on Monday 19th of July 2010 10:20:13 AM
Yes, I would do a bank a/c as well. BAck to VT, can you not trick the system? Create something in VT+ and open it with VT Cash? Just an idea...I have VT+ but Cashbook I haven't got installed and haven't got much time today so can't try it...
Sorry I am not on it today.... The original question was about expenses she payed to herself? If they are not business expenses then they are simply drawings to be technically correct even if it's more then the earnings, aren't they? Anything she pays in is capital introduced. Be careful not to mix up personal and business even if she is self-employed the business is a separate entity. It can be really difficult sometimes with self-employed but...
