For point 1 and 3 i would use: 6201 Advertising... maybe subcatergorise it down again to 6210 and 6211 if you do more videos for example As for 2, I made a new account 'web hosting' and 'web design' and clasified it as an expense so something in the 7000 area would suffice maybe 7510?? (google sage nominal codes list and you will get a full list)
As for the expenses going out, i would be careful. HMRC are very particular about these... try this for size: http://www.hmrc.gov.uk/factsheets/expenses-allowances.pdf (page two second box down)
Happy to help
-- Edited by ClawzCTR on Thursday 31st of January 2013 01:17:40 PM
I am doing our first year accounts for a small online business. I'm relatively new to accounting and Sage so hoped someone may be able to offer some advice on how to account for a few of my expenses. We are a limited company and not VAT registered. We sell products on eBay, Amazon and our own website. Typical sales value £50.
1. Graphic design costs. We paid a graphic designer to make a company logo for us. What kind of expense should this be classed as? Could you suggest a nominal code in Sage
2. Website build costs. We paid a few hundred pounds to have our ecommerce site built.
3. Product videos. We paid a few hundred pounds for a range of product videos promoting our business/products.
Finally, we do not have our own premises so when meeting new clients or designers etc we normally do this is a cafe or restuarant. Can we expense these items? Typically we'd spend £10 on a a quick lunch or some coffees.
I don't use Sage so treat the nominal codes with a pinch of salt. Others will pop along to tell you the codes that you should use.
1. Graphic design costs. We paid a graphic designer to make a company logo for us. What kind of expense should this be classed as? Could you suggest a nominal code in Sage
Depends on the arrangement. If you purchased a product then this would go to Advertising & PR (6201). If it you hired a consultant to work with you on the design then you are paying a freelancer for a service rathe than the purchase of a product (7602 or 7603 dependant upon how you treat freelance services)
2. Website build costs. We paid a few hundred pounds to have our ecommerce site built.
Advertising & PR (6201)
3. Product videos. We paid a few hundred pounds for a range of product videos promoting our business/products.
Advertising & PR (6201)
4. When meeting new clients or designers etc we normally do this is a cafe or restuarant. Can we expense these items?
You can put this through the business but it would be added back for tax purposes as such is not an allowable expense. Would go under entertaining (7403). Your accountant will unravell all of the disallowed expenses at the year end when preparing your tax return and accounts.
Hope that helps get the ball rolling.
Shaun.
p.s. for Sage take absolutely everyone elses advice ahead of mine.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
oops, sorry, not trying to tread on shoes. There was no other answers when I started writing.
Your answer sounds good but I personally think that point (1) could go two ways dependent upon the arrangement with the designer. What is your view on that one considering my response?
Christopher,
Gary knows a damn site more about Sage than I do so I would go with his suggestions over mine. Just wait a min though until he's had a rethink about point (1).
kind regards,
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
If you don't mind I have another question for you as I think I may have made a mistake:-
I am not VAT registered at the moment. However, I've been entering my purchases using the T1 VAT code showing the cost split in the NET column plus the separate VAT in the VAT column. I've been advised this may be incorrect as I can't deduct the VAT as an expense so I should have put the total cost inc. VAT in the NET column and used a T0 VAT code.
Is this the case/have I received correct advice? I'd love you to say no as I've entered heaps of purchases already using this method so have a lot of corrections to make if they're right!
its that darn advert that they slap in the middle of the thread. It throws a lot of people. But, adverts keep the site free so we can't complain.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
uh oh! guess I've got a lot of corrections to do. could anyone suggest the quickest way to go back and edit 50 or so purchases from T1 with VAT accounted for separately to the correct treatment - T9 with the total amount in the NET column?
As an aside, I've imported goods from Asia, lets say £10,000 supper invoiced. On entry to the UK I was invoiced by my shipping agent for £500 shipping fees + VAT on the total amount (i.e. 20% x (10,000 + 500). how should i account for this VAT paid to my shipping agent?
Shamus, No toes hurt so your ok! ;) lol. Your point is interesting yes, and i would probably treat it the same... I would ask him for maybe a breakdown on the invoice so i knew what to charge and where. I did this with my designer (no moneys crossed hands as we exchanged services) but he broke the invoice down into 'intelecual cost' of him branding the business and then the tangable parts of the invoice such as creation of business cards of leaflets. But like you say Shamus that would depend on this situation...
As for knowing more about Sage... not me... lol. Im more of a QuickBooks user now! :D lol. I just googled the info (cheating i know! lol)
And your VAT predicament... yeap sorry your gonna have to redo it all... as your not VAT reg, you will have to reverse them all and include it in the NET figure. Well thats my understanding on the way this sort of software works, i could be wrong... but once a VAT liability has been accrued then what do you do with it... you cant pay it.... maybe a journal entry?? Somone who's better quafied in this should field this answer me thinks... :/
could anyone suggest the quickest way to go back and edit 50 or so purchases from T1 with VAT accounted for separately to the correct treatment - T9 with the total amount in the NET column?
There isnt a quick way of doing above. But would you could do is export your day book to csv file, sort by nominal code then get the total of VAT that should have been posted to each expense nominal then do a journal for this ie Dr expense nominal and Cr 2201 purchases tax. You should code these as T1 in case you become VAT registered in the future so the Dr and Cr cancel each other out when do VAT return
As an aside, I've imported goods from Asia, lets say £10,000 supper invoiced. On entry to the UK I was invoiced by my shipping agent for £500 shipping fees + VAT on the total amount (i.e. 20% x (10,000 + 500). how should i account for this VAT paid to my shipping agent?
If you are not VAT registered you just post the gross amount of £600 for shipping fees to relevant nominal eg carriage account.
