Up to now I have been keeping all my clients books using Excel spreadsheets, as I only had a few clients and was just starting out this was ideal for me both financially and experience wise.
So now I am starting to pick up a few more clients I decided I would start to look at using a software package, after reading a lot about it on this forum I thought I would give VT+ a try, as it seemed to adequately suit my needs so I downloaded the 60 day free trial and decided to have a play.
I have been putting in a set of accounts purely to get used to it and to see how I got on, and I am more than happy but half way through the year the sole trader done some sub-contracting work and was taxed at 20% by the contractor, up to now all other income was gross and this is where I am a bit stuck as in how to allow for the deduction.
If I put the gross amount down as Income then the bank account will not reconcile, if I put the net amount down I will have to gross these payments up at the end of the year to get an accurate turnover figure.
Just wondering if anyone can advise me on the best way to account for these transactions.
Any help would be greatly appreciated.
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Doug
These are only my opinions of how I see things and therefore should not be taken as advice
I am assuming you have keyed an invoice for the gross amount to a customer account. So key a dummy credit note but key it to CIS tax instead of sales. Key net payment to bank, link payment to invoice and credit note.
edited for typo
-- Edited by Cheshire on Sunday 26th of February 2017 09:10:40 AM
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
That makes perfect sense, but all I had been doing was just inputting information by using bank statements just to get a bit of practice, all I had was incoming and outgoing until I came across the CIS bit, gonna go back on it now and play with inputting Invoices.
Cheers
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Doug
These are only my opinions of how I see things and therefore should not be taken as advice
In your case then, key as gross payment to sales straight from the bank and key a receipt but to CIS tax. Has the same net effect.sales correct, tax correct, bank rec done. Job done.
Assuming the tax is taken off correctly and you have corresponding tax certificates.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Lol. No what's sadder is setting the alarm for 5.30 on a Sunday to do some work wrestling with a very old PC, an ancient sage (too old to upgrade to mine and downgrade again) and a pile of accounts that have chunks missing with a tight as hell deadline. Could've gone back to bed for a couple of hours whilst the flippin PC winds itself up.
At least you are having fun.
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
