Free Agent - accounting for fuel paid per mile.

[paulears]

I should know this, but in FreeAgent with my van everything is neat and tidy - I stick £100 of diesel in my van, the receipt is £100 and the motoring expenses box means the bank transaction clears the expense as normal. However, I need to do a few journeys in a car, but can't quite work out how the mileage allowance gets entered. I'll have a receipt for maybe £50 for the fuel I put in, but the miles claimed might mean the amount I can claim as the expense is say £60. How do I enter this kind of transaction where the money going out of the business account doesn't match, and worse - how do I enter the actual expense. I have no correct receipt to scan, and really haven't got a receipt at all? Do I NOT scan the petrol receipt, and create an expense with no 'evidence'. I can't get my head around the correct system to implement. So far FreeAgent has worked brilliantly for me - but everything always matches up. How do you work it when there is no receipt, and the bank won't match?

In effect, the bank transaction might be short a few quid, or if I guess wrong, over. I can't split one payment into £45 motoring expenses and £5 money paid to drawer?

There must be some kind of system for doing this correctly?

 

[GLAbusiness]

I would explain the receipt as money paid to user Directors loan. Then process the mileage as an expense from the directors's loan account. Assuming Ltd company.

 

[paulears]

I'm a sole trader, so that avenue is closed to me - but does seem a bit of a fudge/

 

[Scalloway]

The payment goes to drawings. You should either do a journal entry debiting motor expenses and crediting drawings or make a payment to your personal account. This should be backed up with a mileage log.

 

[paulears]

Thanks Scalloway, but I've no idea how to do any of that in FreeAgent? I can easily create a manual expense item, but then I have a bank transaction that can't be resolved as the amount will be different. This can easily show the actual miles and amount claimed per mile - and I suppose it doesn't have to resolve (and go green!) but it looks untidy and somehow not correct.

Maybe there is a way to use a single bank transaction to clear multiple invoices - that too would help me.

 

[STDFR33]

Have you claimed actual expenses or the mileage rate for this vehicle in the past?

 

[paulears]

I've not used this vehicle before - it's my daughter-in-laws 19 reg Audi which I hope creates a better impression than my Vivaro van, or the family Suzuki.

 

[Scalloway]

how to do any of that in FreeAgent?

There is a video here that show how Free Agent can do it for you.

https://support.freeagent.com/hc/en-gb/articles/115001218250-Video-How-to-record-a-new-mileage-claim

 

[paulears]

Cheers Scalloway - I'd not spotted that. I'll work on how to match the bank account entry up. Being a different amount from the claim I'm not sure how that works - maybe just have to accept that it won't turn the right colour and will always be highlighted? Thanks for the link.

 

[Scalloway]

how to match the bank account entry

The bank account entry is a completely separate thing. Enter it as drawings. The mileage claim should reduce drawings leaving you with a net gain or loss.