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Pre-Trading Expenses

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angmc1
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Pre-Trading Expenses

Post by angmc1 » 15 Nov 2018, 14:45

Hi

I'm hoping to set up a small jewellery making business and will probably be using one of the Sage Cloud options. There's no VAT involved and I'll be using cash basis accounting. I have already bought various tools and materials and I know I can included them as pre trading expenses but I have some questions if you can help:

1) Do I enter the expenses as bank payments using relevant nominal code e.g 5000 for materials 7000 for tools? I know I use the 1st day of business as the date but can I enter them as lump sums e.g. total materials £1000 to NC 5000, total tools £2000 to NC 7000, or do I have to enter each payment/invoice individually? I have all the invoices.

2) I don't have a business bank account at the moment so all purchases have been through my personal account, do I need to set up a Capital Introduced NC (3200?) and journal the balance from the bank to it e.g. JD bank £3000, JC Capital Introduced?

Hope this makes sense.

Thank you

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brucedenney
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Re: Pre-Trading Expenses

Post by brucedenney » 15 Nov 2018, 15:21

1/ I think you can enter them as lump sums, you will need to be able to break them down if there is an inspection, but as long as you have the paperwork it is fine.

2/ You could do it that way, or you could add your personal bank account to sage and make all the payments from it then later on when you have a real bank account and have made some money, you can repay it with a bank transfer back to you, or you could journal it to be capital introduced. If you are likely to make more purchases on you personal account then I would set it up as a bank account, if this is a one off then maybe not.
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angmc1
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Re: Pre-Trading Expenses

Post by angmc1 » 15 Nov 2018, 20:08

Thanks for the reply. I'll be using my personal account for the moment so I'll set it up on sage. So glad to hear i can enter the payments as lump sums, I've got a ton of invoices!!

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