I'm helping a friend out by doing his bookkeeping on Sage which is then sent to his Accountant.
As he's a friend and I'm not getting paid, I don't want to be "accounty" with him by disallowing things etc; I'm leaving him to deal with that with his Accountant. However, I'm not sure how to treat bank payments for which there is no backup receipt/paperwork. As they have been paid from his business account they need to be recorded but would I put them to the Director's Loan Account or would I post them to where I think they should go, i.e. if it's £2.50 from Costa post to subsistence?
Also, he transfers amounts to his personal account and then transfers amounts back to the business account ready for when (for instance) there's an invoice due. I've been recording the transfer as going in and out of his DLA, is this the correct way to treat these transfers? Could there be an issue ultimately if the amount transferred out isn't the same as the amount transferred back in, and if so should they be given their own nominal code?
He's on the flat rate scheme so all purchases are currently going to T9 (on Sage), so I wan't sure how important it was with purchases whilst on the scheme.
If your helping him you will be "accounty" with him and disallow/exclude/be a complete barsteward and make his life a misery as in doing so you are saving him money.
Stick to the line that without evidence by way of a receipt then its not an expense.
What justification is there for the receipt being put to subsistence? were they away on business?
Everything that you write points to this being a limited company rather than self employed, please correct me if I'm wrong.
Yes, amounts taken from the company and injected into the company would go via the DLA. If the director owes the company money at the period end then this would be deemed an interest free loan (a benefit) so this should be cleared (usually by declaring a dividend for the balance). The other way around where the company owes the director money is fine to keep in the DLA.
kind regards,
Shaun.
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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.
It is a limited company and he is away on business all the time. I do understand that there's a limit to how much he can claim in subsistence, but again I'll leave that to his Accountant to deal with. I'm just trying to help him out by keeping a record of his millions of receipts!
