Small Business QuickBooks Expense Categories Advice
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I'm going to be at odds with the accountants above as I'd suggest you look at the various QB Online tutorials that are available on You Tube. Just make sure you avoid ones done by Americans dealing with specifics applicable to their accounting system (1099 reports for example)
For example, is one for setting up new accounts:
https://www.youtube.com/watch?v=xp-rcPZtUc0&list=PLVxBmyedTVhRnNpk_z4Lac1EhpZkRjDuF&index=18
this is customising your invoices
https://www.youtube.com/watch?v=SJW4skFvOPk
and this is QB's own UK channel with various tutorials that should be of use
https://www.youtube.com/user/IntuitUK/playlists0 -
Thank you.
I have picked my way through any useful tutorial I've been able to find. I think its QBO itself that is causing problems with the invoice special field as its definitely been set up correctly. Some of the tutorials were useful. But I've now purchased Quickbooks Online for Dummies for more detailed help.
I like things organised. I am learning fast but need better professional help too. Another accountant next week., now we have a better idea of the questions we should have asked the first one. Will ask him for sources of information too.
Will get there. I've had to give my AAT training a rest for a couple of days but I reckon doing the practical bookeeping will reap rewards with that too as I've forgotten more than I remember from my accounts days lol. I'm way ahead of the timetable anyway.0 -
I'm watching this thread with interest as your ex's business has many similarities to mine, I'm a computer engineer working as a contractor so doing lots of miles in a van and very few purchases as basically selling labour only. For now I'm using a Google spreadsheet which I have shared with my accountant. This means she can take a look at it anytime so hopefully that isn't a stupid thing to do.
I can't believe the accountant was charging £140 per month, that sounds extortionate for such a simple business, I've been advised here that I should expect to pay up to £500 for the year end accounts and have found someone who quoted £400.
Did he have to buy the van outright, on hp or is he renting it? I think it makes a difference to how you claim your expenses for it.
Are you planning to claim for his mileage by individual receipts or by the mile?
My accountant advised me to keep a diary of my mileage but not to record every journey on the spreadsheet. I do record every purchase of fuel though.0 -
so your accountant has not ensured you understand the difference between claiming the approved mileage rate allowance and claiming all costs adjusted for private/business usage %My accountant advised me to keep a diary of my mileage but not to record every journey on the spreadsheet. I do record every purchase of fuel though.
https://www.gov.uk/government/publications/rates-and-allowances-travel-mileage-and-fuel-allowances/travel-mileage-and-fuel-rates-and-allowances
https://www.gov.uk/simpler-income-tax-simplified-expenses/vehicles-
you get what your pay for in terms of accountants!0 -
I'm watching this thread with interest as your ex's business has many similarities to mine, I'm a computer engineer working as a contractor so doing lots of miles in a van and very few purchases as basically selling labour only. For now I'm using a Google spreadsheet which I have shared with my accountant. This means she can take a look at it anytime so hopefully that isn't a stupid thing to do.
I can't believe the accountant was charging £140 per month, that sounds extortionate for such a simple business, I've been advised here that I should expect to pay up to £500 for the year end accounts and have found someone who quoted £400.
Did he have to buy the van outright, on hp or is he renting it? I think it makes a difference to how you claim your expenses for it.
Are you planning to claim for his mileage by individual receipts or by the mile?
My accountant advised me to keep a diary of my mileage but not to record every journey on the spreadsheet. I do record every purchase of fuel though.
A lot of that will depend on whether you're a sole trader or whether you a trading via a limited company. Different rules and procedures for each, meaning different accountancy fees. Also whether the accountant is qualified or not.0 -
He purchased initially a car, and then a van outright so no financing involved.
We are now preparing mileage reports through an App called MileIQ. If you enter postcodes for where you went each day (have to do return journeys as well), it calculates the 45p a mile (you enter your car model) mileage allowance. From reading the HMRC website I believe if you use mileage calculations at 45p a mile (if under 10k miles) this is judged to contain a proportion to cover petrol costs, car purchase costs and insurance. Once we get current, the app will pick up his journeys automatically but a bit of a life saver at the moment lol.
But I get very confused when I start wondering if I now need to take all the fuel/insurance costs out of Quickbooks. I haven't and won't until spoken to an accountant who seems to know what he/she's doing. I would have thought these should be included as they are business costs, and are business expenses, so reducing net profit.
Head is just spinning lol. Trying to figure out how prepare what you need for tax assessments while still maintaining 'big picture' books for the business. Are mileage calculations separate to the books for the business (i.e. just produced for the self assessment form)? I could be being completely stupid (and obviously have a lack of knowledge of self assessment and 'the big picture' in accountancy terms) but head is mush lol.
And try calculating 10 months of daily mileage even if you are putting it into an app lol.., my ex can work from 20:00am to 8am then go back at 16:00 so having to be quite careful with dates.
I am very glad its helping at least one person!
Eagerly awaiting the arrival of my Quickbooks Online For Dummies book as well.
If you hear a small whimper and bang, my head has disappeared lol.0 -
Sadly, with MTD coming in, use of spreadsheets will become a thing of the past. If you're VAT registered, you'll have to submit VAT figures by accounting software from 2019 (they're closing their online website submission system. They would accept data based on a spreadsheet, but only using some kind of spreadsheet conversion software, for which no software providers have yet indicated any intention to make!). If you're not VAT registered, you have more time, but compulsion of data submission via software will come eventually, all part of HMRC's master plan to scrap tax returns!
Is this the MTD that was first announced in July this year?
If so, I believe the details were only published about 1 month ago.
As you say, it is not going to be introduced until 2019, and hopefully between now and then, there will be some software available to support small businessess.
I'm hoping someone will offer it for free for small businesses, like the various PAYE software available, offered in the hope you will upgrade to their premium software in due course.0 -
so how have you accounted for the purchase costs?deannatrois wrote: »He purchased initially a car, and then a van outright so no financing involved.
as "you" are a sole trader has the car and/or van been "brought" into the business? If it has you will need to adjust for personal use, hence the need to keep a mileage log.
ooops. The mileage rate is, as you say, intended to cover all the costs of a vehicle. If you claim the mileage rate you cannot account for the running costs of the vehicle as a separate part of the business expenses, that is double counting and is precisely why there is the option of using the "simplified expenses" system when you are a sole trader so you avoid having to record lots of bills and adjust each for personal usedeannatrois wrote: »We are now preparing mileage reports through an App called MileIQ. If you enter postcodes for where you went each day (have to do return journeys as well), it calculates the 45p a mile (you enter your car model) mileage allowance. From reading the HMRC website I believe if you use mileage calculations at 45p a mile (if under 10k miles) this is judged to contain a proportion to cover petrol costs, car purchase costs and insurance. Once we get current, the app will pick up his journeys automatically but a bit of a life saver at the moment lol.
But I get very confused when I start wondering if I now need to take all the fuel/insurance costs out of Quickbooks. I haven't and won't until spoken to an accountant who seems to know what he/she's doing. I would have thought these should be included as they are business costs, and are business expenses, so reducing net profit.
as sole traders there is no distinction between the business and the tax. Either the expenditure is business related and thus reduces his profits and his taxable income, or it is personal expenditure and thus irrelevantdeannatrois wrote: »Head is just spinning lol. Trying to figure out how prepare what you need for tax assessments while still maintaining 'big picture' books for the business. Are mileage calculations separate to the books for the business (i.e. just produced for the self assessment form)? I could be being completely stupid (and obviously have a lack of knowledge of self assessment and 'the big picture' in accountancy terms) but head is mush lol.
his business mileage log is a vital part of the business expenditure record
whilst no one can say if you will be "lucky" enough to get a tax inspection, without a mileage log "you" will be on a rather sticky wicket without one, so keep at it.deannatrois wrote: »And try calculating 10 months of daily mileage even if you are putting it into an app lol.., my ex can work from 20:00am to 8am then go back at 16:00 so having to be quite careful with dates.0 -
Thank you OOec, I am finally understanding the distinctions. What you said above ties in nicely with the 'put vehicle expenses in drawings' the accountant suggested.
Yes mileage calculations are well on the way now.
I have changed accountants. The new one will do the year end accounts and self assessment for £400 plus vat. Extra time needed to help with setting up things will be charged but even if its £2-300 or even £500 (the first year) its a lot less than the other guy was charging. The other accountant has agreed to let me end the relationship,, which was nice of him. I guess he knew it wasn't a good fit.
The new accountant gave me lots and lots of information. I can set up our vehicle expenses as drawings, and then credit the mileage allowance for the car within that. The van we might be better off treating as a commercial vehicle as initial purchase and more expenses are allowable against a commercial vehicle. Practically, I have got to look into a way to set up subcategories within drawings to make them vehicle specific. So today will be using links I have found online to help with learning about that.
He also said that the food expenses my ex has (he just buys food we are not talking expensive take aways or eating out bills) should be allowable as well. Dog expenses will be proportionately allowable but no idea yet how to work out the proportion as my ex works 6 days a week, sometimes more when its 24 hour shift blocks. Yes he gets tired but I guess we are both a bit obsessive lol. I think for him, its just so much better than the minimum wage jobs he's had ever since I've known him (along with the attitude he used to get from people he worked for). Its nice to see him getting paid well. He's even managed to get another contract for his contractor (he's very good at networking and establishing a trusting relationship, employers have been taken the mickey for years.., now he's doing it more for himself).
So a lot of sorting out to do, but its doable. Will be doing some research today, and then will email some questions to the accountant but aware of needing to solve as much as I can myself. My Quickbooks online for Dummies book has turned up. So lots of reading. I need to know how to produce useful reports as much as anything. its already proving useful.
Thanks for all your advice.., it has been a big help.0
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