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Level 1

Cheques that include expenditure and income

We have to write a cheque to a bank for wages each month for staff wages, but that cheque also includes deductions for rent and food which have to show as income what is the best way of recording that transaction. eg

Staff wages       2,000 paid out as expense

Rent for A                -200 should be recorded as income

Food for A              - 10 should be recorded as income

Cheque  Value 1,700

 

Please advise - Thanks

We are using quickbooks Plus Online for an NGO.

 

Solved
Best answer August 17, 2018

Accepted Solutions
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QuickBooks Team

Cheques that include expenditure and income

Hi AlanLIA,

 

Welcome to QuickBooks Online's UK Community Page.

 

The first thing I'm going to advise you of is to check with your accountant. I've ran a couple of tests on my QuickBooks.

 

I have a functional solution. This can be done through the usage of your Undeposited Funds account. I've done this by working backwards.

  1. Create a Cheque, with your Bank Account in the bank account box at the top, and the account "Undeposited Funds" chosen under Account Details, put £1700 in the amount, NO VAT as the VAT code if you are vat registered.
  2. Create a Transfer, transferring funds from Undeposited Funds, to Payroll Clearing (or whichever account you have the staff wages sitting in, waiting to be paid out - are you using QuickBooks Payroll software?) for an amount of £2000
  3. Create an Invoice, with the first line as Rent, amount as £200 and the second line as Food, amount as £100 select the appropriate VAT Codes for recording the income (check with accountant or HMRC if unsure - only if vat registered).
  4. Receive Payment on the invoice, depositing full amount to Undeposited Funds.

Functionally, you've transferred the £2000 wages to the Undeposited funds account, then paid £1700 out of the business to the employee, retained the £300 worth of income; your Undeposited funds account will show the same balance it was before you began step 1. Your wages liability account should have had the balance cleared too.

 

Let me know if you have any questions.

View solution in original post

5 REPLIES 5
Highlighted
QuickBooks Team

Cheques that include expenditure and income

Hi AlanLIA,

 

Welcome to QuickBooks Online's UK Community Page.

 

The first thing I'm going to advise you of is to check with your accountant. I've ran a couple of tests on my QuickBooks.

 

I have a functional solution. This can be done through the usage of your Undeposited Funds account. I've done this by working backwards.

  1. Create a Cheque, with your Bank Account in the bank account box at the top, and the account "Undeposited Funds" chosen under Account Details, put £1700 in the amount, NO VAT as the VAT code if you are vat registered.
  2. Create a Transfer, transferring funds from Undeposited Funds, to Payroll Clearing (or whichever account you have the staff wages sitting in, waiting to be paid out - are you using QuickBooks Payroll software?) for an amount of £2000
  3. Create an Invoice, with the first line as Rent, amount as £200 and the second line as Food, amount as £100 select the appropriate VAT Codes for recording the income (check with accountant or HMRC if unsure - only if vat registered).
  4. Receive Payment on the invoice, depositing full amount to Undeposited Funds.

Functionally, you've transferred the £2000 wages to the Undeposited funds account, then paid £1700 out of the business to the employee, retained the £300 worth of income; your Undeposited funds account will show the same balance it was before you began step 1. Your wages liability account should have had the balance cleared too.

 

Let me know if you have any questions.

View solution in original post

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Level 1

Cheques that include expenditure and income

Hi JamesC

 

Thank you so much for the quick and very helpful advice. It works well with one amendment I had to use an expense not a transfer in Stage 2 as we allocate wages to different Classes.

 

We can't use Quickbook Payroll as we are a Ugandan NGO working in Uganda!

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QuickBooks Team

Cheques that include expenditure and income

Hi AlanLIA,

 

You're most welcome, I'm glad i could help you record this. I had toyed with the idea of using an expense myself, i can understand the amendment to include class tracking.

 

Are you using a UK Version of QuickBooks, or our Global version of the product?

 

By all means please post again if you have any other questions.

 

 

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Level 1

Cheques that include expenditure and income

HI

We - Love in Action - use the UK version and I also look after another NGO who use the Canadian Version.

 

I have an Accountant account for UK ( I also work with a commercial company in UK on QuickBooks Online) and I wish I could access both from the one account- is that going to be possible one day?

Highlighted
QuickBooks Team

Cheques that include expenditure and income

Hi AlanLIA.

 

I will be honest with you, I do not know. The difficulty would be that the UK version and Canadian version are very different in terms of capabilities based on things like tax systems or general Accounting methods used in different regions. That's not to say we wouldn't be able to combine regional accounts together in the future however. I will be sure to submit this as feedback to our Development team as I can completely see how it would be more convenient to have all the accounts located in one place. Smiley Happy