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1809277
December 8, 2021
Question

Owners purchase with VAT receipt

  • December 8, 2021
  • 1 reply
  • 0 views

Hi

I am very new to QBO and am just getting going. I am a sole trader and VAT registered. I pay for most of my materials from my personal bank account and don't reimburse myself, nor do i want to.

If I record purchases for my business that i have paid for personally, I think I do it via Accounting/Chart of Accounts/ Owners Investment (Equity). How do I ensure that the VAT part of the amount is shown/included in my VAT record?

Also I have uploaded the receipt for purchase in Transactions/Receipts. How do I attach this to the investment? I can only see a method of attaching a file from my computer not a receipt already uploaded to QBO.

1 reply

Chariot4info
Chariot4info
December 8, 2021

You need to use an expense for the transaction using the category for that transaction. So for materials classify them as materials paid for from your personal bank account.

 

If you have connected your personal account to quickbooks online, the only expenses and income you should be assigning to your equity (investment account) are transactions not related to the business running costs, such as your mortgage/house rent, gift payments from friends etc.

 

If you do not want to connect your personal account, still create a cash at bank account for your personal account so you can record where you paid for those transactions.

 

At the end of the tax year you can clear the personal account by transferring the funds necessary to make that account equal zero from the equity account.

 

ensuring all transactions are recorded in the correct income/expense accounts will ensure your VAT is correct but you can check this by reviewing the VAT control account or running the VAT checker in the VAT section.

    1
    1809277Author
    December 8, 2021

    Hi

    Thats great help, many thanks. I won't be linking my bank accounts so how would I create a cash at bank account, presumably this just means my own funds?

    Many thanks

    E
    emmam6
    March 1, 2023

    Hello Community Users, We just wanted to pop in and add some comments to this thread about purchasing goods for your business from personal accounts. You can as an option set up a cash at bank at hand account in the chart of accounts and name it petty cash and then use to record those expenses from your personal account so you can keep track of the amount spent. If you are wanting to record as equity used you can set up an opening balance equity in the chart of accounts with the balance you added and then expense from that equity. We see you do not want it to show as a loan to the business as you will not be claiming it back. You can add VAT in the expense you create as normal. We'd recommend confirming with an accountant the best option for your business.

    Any questions let us know.

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