Accruals basis in Self-Employed or splitting Expenses in Simple Start

Hi there, michael. I want to share some details about moving to an Accrual Basis accounting method in QuickBooks Self-Employed.

You're correct that QBSE is cash basis only and that you can alternatively use the QuickBooks Online Simple Start to switch to your desired accounting method. Ideally, the functionality to separate personal expenses from the business ones is currently unavailable in Simple Start. Nonetheless, you may reach out to your accountant to properly allocate your transactions and to keep your books in order. 

If you consider using Simple Start in the future, see this guide to manage your company: Get Started with QuickBooks Online.

Keep in touch if you have other concerns regarding this matter. We'll make sure to respond to you as soon as we can. Have a good one!

Thanks for your reply. I don’t have an accountant which is why I’m using Quickbooks so I can do my own accounts. 

I understand I can exclude transactions in Simple Start, effectively removing the personal? However, can I split or adjust certain items so only the business element and amount is added as an expense?

If I can’t do one of these with either simple Start of Self-Employed I’ll have to look at Xero or some other alternative solution. 

Hello there, @michaelamherst.

I'll help you splitting transactions in QuickBooks Online Simple Start plan.

QuickBooks Online can help you track your business expenses. If you want to track your personal expenses, you can create a different account in Chart of accounts.

Here's how:

1. Go to Settings ⚙.
2. Choose Chart of accounts.
3. Click New.
   Depending on your account view, you’ll either see a panel labeled the New account or the New category. Select the option you see below for next steps.

Once done, when splitting a transaction, you can choose an account for the personal and business for some part of your transaction.

Here's how:

1. Go to the Transactions menu and select Banking.
2. In the For Review tab, locate the expense and click it.
3. Select the Split transaction hyperlink and enter the details.
4. Verify the details and select Apply and confirm.

For future reference, you can read this article to learn the reconciliation workflow: Learn the reconcile workflow in QuickBooks.

Let me know if you have questions about splitting a transaction in QuickBooks Online. I'm always here to help. Have a great day.

@Ethel_A that’s so helpful. Thanks so much! 

It's a pleasure to have you here again, @michaelamherst.

I’m glad that my colleague Ethel_A was able to help with your concern.

Please know that you’re always welcome to post in the Community space for any QuickBooks concerns you may have.

If you need tips and resources to manage your QuickBooks Online account and finances, feel free to visit our Support page to learn more. This provides information to help your navigation experience be more effective.

Let us know if you have other questions about managing your account in QuickBooks. We'll be happy to lend a helping hand. Stay safe!

Ok I'm not sure if this does help. It doesn't give the option to create a new Account Type or Detail Type so not sure how or where to label Personal. If I did randomly put it under 'Unapplied Cash Bill Payment Expense' say, how will that affect my use of the category for ACTUAL business expenses as opposed to Personal?

I'm worried there really isn't enough customisability on Simple Start to allow me to use it when my business is managed from my personal account.

Sorry I don't know if there is some confusion as in I don't mean personal expenses paid for from my business funds. I only have one bank account, a personal account, out of which I pay all my day to day living costs but also any business expenses incurred. I also receive my business income into this account. I need to use accruals basis for my accounting but therefore also need a way to mark off or exclude from my accounting any payments made that are not for business purposes. Is there a way to do this? I understand I could just exclude those payments? However, if so, is there anyway to also split the rare payment - say my mobile phone bill - which will be only a partial business expense?

Hi michaelamherst, thanks for getting back to us. 

It would be recommended to exclude any personal expenses from the banking screen so that your profit and loss and other business reporting are correct. 

This does, however, mean that you won't be able to reconcile properly, as there will be a difference between your bank balance and the transactions added in QuickBooks (the difference being the total amount of excluded transactions). 

You can still manually reconcile that account by viewing the bank register in the chart of account and comparing this against your bank statements. 

The split function on the bank transactions doesn't allow for a partial amount to be excluded (i.e. the whole transaction has to be split between accounts). In this scenario, you can exclude the transaction and then record the split portion manually via the + New button. Hope this helps :)