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Experienced Member

Cash

Quite a bit of my business is cash based. If I enter every cash transaction into quickbooks, then pay some of it into the bank do I mark the amount I've paid in as personal income? If it goes in as business I'm counting it twice. 

Solved
Best answer 11-01-2018

Accepted Solutions
QuickBooks Team

Re: Cash

Hi Zakannie,

 

I'm going to give you what i think the answer is; I think you need to mark it as personal income.

 

I'm not an authority, i have to make that absolutely clear. The person who should tell you the answer to this is either HMRC or an Accountant - Probably an Accountant.

 

You've already recorded the income through the transactions page, it's already hitting your SA form and we don't want to double count it. You don't have an option to exclude a transaction, other than marking it as personal, so functionally speaking i think you need to mark it as personal.

 

This is one of those scenarios where it's not something i want you to get wrong, and it's your responsibility to ensure it's right.  On QuickBooks Online we'd use a function of undeposited funds, which isn't available on QBSE as it's not normally needed.

 

Thanks,

 

Hope this helps,

14 REPLIES 14
QuickBooks Team

Re: Cash

Zakannie,

 

Are you using QuickBooks Online Esssentials/Plus or QuickBooks Self Employed?

 

Thanks,

Experienced Member

Re: Cash

Hi James, 

I'm using Quickbooks Self Employed. 

QuickBooks Team

Re: Cash

When you enter the cash transactions, (prior to depositing) - are you doing this through the "Transactions" page, or through the "Invoices" page?

 

Are the cash payments you've entered in so far but not deposited counting towards your SA103? (Self Assesment)

 

Thanks,

 

JamesC

Experienced Member

Re: Cash

I'm entering them through the transactions page and all income counts towards self assessment. 

 

So, for example, I might enter £400 worth of transactions for the week. Bank £300 and use £100 cash for buying living essentials. 

QuickBooks Team

Re: Cash

Hello Zakannie,

 

Can I please just check are you referring to allowable and disallowable expenses like from the self assessment form? When transactions are categorised the self assessment should be up to date.

 

Allowable

  • Rent, rates, power and insurance costs
  • Advertising and business entertainment costs
  • Construction subcontractors
  • Cost of goods for resale
  • Office supplies/ equipment
  • Other business expenses
  • Phone and internet
  • Professional fees
  • Property/equipment repairs
  • Rent/ Utilities/ Insurance
  • Travel expenses
  • VAT paid
  • Wages and other staff costs

Disallowable

  • Car & Van expenses
  • Home office expenses
  • Interest on bank/loan
  • Meals and entertainment
  • Taxes

Split 50/50 between allowable and disallowable

  • Bank charges
  • Credit card charges
  • Interest on bank/ loan
  • Other financial charges
  • Repayments of loans/ overdrafts

Neither

  • Business income
  • Credit card payment
  • Owner Deposit
  • Owner Withdrawal
  • Transfer
  • Uncategorised

Please let me know if this helps with your question.

Experienced Member

Re: Cash

Sorry Edward,   we've come right off the point I was asking about. I'm rubbish at trying to explain myself!

  • If I enter my cash transactions as I receive them, I use the "Add income Manually" button on the transaction page of the app.
  • Approx once a week, I bank some of that cash, keeping enough cash back for my shopping etc.
  • When I reconcile my bank statement, if I mark the money I have banked as "Business Income" I am effectively counting some of it twice and  adding in more income than I earned. 
  • So, how do I account for it and keep my account straight? 
QuickBooks Team

Re: Cash

Hi Zakannie,

 

So just to confirm that you are banking all the income but keeping some separate and not actually banking the total?

 

Thanks,

 

 

Experienced Member

Re: Cash

Sorry for slow response.  

Yes that is correct

QuickBooks Team

Re: Cash

Hi Zakannie,

 

I'm going to give you what i think the answer is; I think you need to mark it as personal income.

 

I'm not an authority, i have to make that absolutely clear. The person who should tell you the answer to this is either HMRC or an Accountant - Probably an Accountant.

 

You've already recorded the income through the transactions page, it's already hitting your SA form and we don't want to double count it. You don't have an option to exclude a transaction, other than marking it as personal, so functionally speaking i think you need to mark it as personal.

 

This is one of those scenarios where it's not something i want you to get wrong, and it's your responsibility to ensure it's right.  On QuickBooks Online we'd use a function of undeposited funds, which isn't available on QBSE as it's not normally needed.

 

Thanks,

 

Hope this helps,

Experienced Member

Re: Cash

Thank you James. 

 

That is what I had been doing, but then I began to doubt  whether it was right.  I understand your position and will check it out with an accountant.

 

Many thanks for your help. Smiley Happy 

 

QuickBooks Team

Re: Cash

Hi Zakannie,

 

My instincts told me that from the beginning, but like you; i was doubting if it was right.

 

Thanks for your understanding, by all means give us another post if you've any other questions.

 

Thanks,

Experienced Member

Re: Cash

Would excluding the banking transaction be another solution? 

QuickBooks Team

Re: Cash

Yes, you can. It can be both, i feel. Consider it like this, the transaction on your bank is a personal transaction, because you've already earned it, and it's yours. So it could be considered personal, you're just putting your own money in the bank account, you don't get taxed for doing that.

 

Excluding it is functionally similar, except it won't be logged with your personal transactions.

 

Thanks,

Established Community Backer ***

Re: Cash

"So, for example, I might enter £400 worth of transactions for the week. Bank £300 and use £100 cash for buying living essentials"

 

You are not Paying your bank. That is a Partial Deposit from the business Cash on Hand.

 

Step 1. Enter the sale as "deposited to Cash on Hand Bank" in your file.

 

Step 2. Then, enter the Expense entry that reflects you Withdrew Cash for personal.

 

Step 3. Transfer from Cash On Hand Bank in the bookkeeping to Operating Checking. This is moving your business funds already processed as part of sales. In your example, then, Cash On Hand is 0 for this date.