Business Purchase using Credit & Direct Debit

[jameslp]

I'm trying to enter a business expense (£200) into Sage for an invoice, which I am paying over a number of months (interest free).

The payments span over two different accounting (and tax) years and I'm wondering how to log the expense and changes to the business bank account.

Should I DEBIT the expense in full to the appropriate account and then CREDIT the same amount to a new 'bank account' for this finance agreement? Then I would post CREDIT transactions from the bank account as and when the direct debit payments are made and DEBIT the new 'bank account' until it reaches zero.

Is this the correct approach? If so, should the new 'bank account' be created specific to the supplier or can it be a generic 'Finance Agreements' one, which can be used for multiple finance agreements to multiple suppliers?

 

[jameslp]

Oh dear, am I completely on the wrong track and everyone is too polite to tell me!? :-/ ;-)

 

[semsley]

Make a supplier account for the invoice and enter the total invoice and using whatever nominal code you have assigned for the expense. Each time a DD is taken from your bank, go to bank -> supplier and enter the amount against the invoice. This will leave the reducing "debt" as a creditor until it is all paid off.

 

[jameslp]

That sounds like a nice, simple solution! Many thanks semsley!