Please Help Capital or drawings

[Tina1]

Hello

Could some one please advise me.
If i pay for a parking ticket from my own cash ( i dont have a petty cash system) Would i Dr -expense acc but what acc would i CR would it be capital as i have put the money into the business or Drawings as i paid for it out of my own money, but i should be able to claim for this so i would need to put the money back to drawings also. Am i making sense.
I did use on sage CR petty cash and DR expense but then not sure how to out the money back to petty cash as its not from the bank acc and i dont want to be out of pocket with drawings. Am i confusing myself please help.

 

[Williams lester]

When you say parking ticket....do you mean a ticket to park or a parking fine?

 

[Tina1]

sorry a ticket to park

 

[Homshaw]

The credit would be Capital - Cash Introduced if you are not a Limited Company

However I don't think car parking fines are tax deductible unless you are an employee and they go on your P11d

 

[Homshaw]

Ticket to park is fine

 

[Williams lester]

DR expense and CR capital introduced. When you repay the money to yourself CR bank & DR drawings.

If you are struggling with this, why not ask your accountant or bookkeeper.

 

[Tina1]

Thank you for your help. Could i add up all my misc receipts and do as you said and post to expense acc and at the end of the month CR the bank and DR drawings.

 

[Homshaw]

If you keep them to the end of the month and pay them out the bank just post the cheque to the bank account and post it to motor expenses or whatever the appropriate account may be

 

[helen5507]

how do i post drawings to sage instant accounts. this is for cash taken direct from the business cashpoint? help please

helen

 

[Jenni384]

Drawings is often set up as nominal code 3000 or so.
If the cash taken from the cashpoint is drawings, do a Bank > Payment and reference the nominal code assigned to drawings. If you're VAT registered then it's code T9.

 

[helen5507]

no not vat registered. so im only doing one posting for that? the reason i ask is i thought i had to do two postings for every transaction or am i just confusing myself?
should i have to produce any paperwork for withdrawals? or is a simple bank statement showing the amount taken ok?

 

[Jenni384]

There are two sides to every transaction (the core of double entry bookkeeping) but bookkeeping software simplifies this in most cases.

If you're doing a bank payment to code 3000 there are two postings here:
Dr Drawings
Cr Bank

You could do
Dr Cash
Cr Bank
then
Dr Drawings
Cr Cash
but this isn't strictly necessary.

If the bank statement says you withdrew cash, and your accounts say that you have taken this to drawings, this is sufficient imo. A cash withdrawal slip doesn't prove anything extra.

 

[helen5507]

Hi Jenni

thanks for your help. what otion do i pick for debiting the drawings account?

can i do the same for wage payments, bank payment to wages nominal code 7004?

last question. what about loan money received in the bank? whats the best way to enter this onto sage? this would be cash paid into the bank.

 

[Jenni384]

Nominal > New > Equity/Capital > Call the new account Drawings.
Repeat, and call a second new account Owners Capital.

Drawings needs to go in the 3000 range, not the 7000 range of accounts.

Wages to staff can go to 7000. Wages to you, if you're a sole trader, need to go to drawings (3000, or a code beginning 3***, the one created in the first step).

If it's a bank loan, you would do a bank receipt to 2300 (or the next code in that range, so 2301, 2302 etc). This is a liability account. When you repay the loan, part of the payment is capital, part is interest. You do a bank payment in 2 parts. The interest component goes to 7903 Loan Interest and the capital component goes to 2300. Alternatively you can put all of it to 2300 and let your accountant work it out at the end of the year.

If it's a loan of your own money, do a bank receipt from Owners Capital.

If it's another loan, say from Bob, then call 2301 (or similar) "Loan from Bob" and put all repayments to this code.

It's much easier to be shown this. It might be worth your while to pay for a couple of hours of a bookkeeper's time just to get these bits straight

 

[QuickHomeBuyers]

Sorry for a question off the topic,

If an invoice named to the company is paid by director from his personal account, is that considered an additional directors loan to the company ?

Whats the be nefit of a bigger/larger directors loan ?

 

[Jenni384]

Sorry for a question off the topic,

If an invoice named to the company is paid by director from his personal account, is that considered an additional directors loan to the company ?

Yes

Whats the be nefit of a bigger/larger directors loan ?

You can take this money back from the company tax free (it's a loan, they owe you it)