My client has two companies, and has a bad habit of purchasing goods for company a from company b bank account and vice versa. I have quite a few invoices to put on to the system that have been invoiced to company a, which are for supplies/services for company b.
I will use the nominal code for loan account for the other company, but in terms of all the transactions showing on the correct account, is this something that the accountant will sort out at the end of the year.
You do not say whether the companies are in a group or seperate? What about VAT (one, both, neither?)
Whilst this is something that an accountant could sort out (at additional cost, at accounting rates!) it is not something that they would be expecting to for a client who employs a seperate bookkeeper and you may find the accountant using that as an excuse to take the clients bookkeeping completely in house using their own bookkeepers.
Interested to know the structure and VAT situation for the companies to determin whether we are looking at incompetence or more untoward motives.
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Shaun
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It is two seperate companpies. One vat registered, the other not. The accountant has spoken to the client on many occasions advising them to use the correct bank account for the correct company.
There is no motive within the company. It is literally just a case of, they dont get the importance of ensuring all purchases are paid for from the correct bank. Any payments that are on the bank statement for the vat registered business, i allocate to a nominal code created as a loan account for the non vat business an T9.
What else can i do other than what i am already doing.
If company A purchases items for Company B and Company A claims the VAT, Company A must subsequently invoice Company B for those items, and charge VAT - so you could prepare those sales invoices every time you see that happen, and post the purchase invoice to Company B but obviously as T9 despite there being VAT. Speak to the accountant about where to show the net sales - maybe just set up a separate 4000 code on sage for now
If company A simply pays for something invoiced to Company B, it would go to the inter company loan account as T9.
-- Edited by FoxAccountancyServices on Monday 28th of September 2015 11:04:48 AM
The majority of the transactions are Amazon/Paypal/Ebay so are posted as a bank payment to the loan account for the other company using T9. I ve never claimed any vat back, so no issues there or the need to invoice company b.
I just wasnt sure if there was something else that i should be doing, rather than posting to the loan account.
Michelle has got this spot on. It is quite common for clients to assume they are being clever and claiming VAT on expenses in the registered company when in reality all they are doing is shifting the vat burden.
You need to get the client to start using the correct company or charge them more for the extra time taken to prepare!
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