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Post Info TOPIC: income paid into personal account


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income paid into personal account
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Hi ,
      I would be grateful if anyone could offer some advice with a problem.
I have got a new client who runs a courier service.When he has given me the last years worth of receipts and bank statements to sort out he has given me his personal bank account statements as well as his business ones.The reason for this is that he has income paid into his personal account from customers but he leaves it in there and doesn't use it for the business.He says that as he has been doing the books himself for the past few years that he has just been adding this cash onto his sales and his accountant has been ok with this.
Is it ok to do this and if so would it be worth setting up a seperate nominal code in sage for this as it wuld make the business account reconcilliation wrong.

Any advice/suggestions would be very welcome
Thanks
stephen 

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If you were happy that you had accounted for all income I would just journal this income into the financial statements Dr Drawings Cr Income or something along this line.

He has effectivly drawn the money from the business (as its in his personal account) so an adjustsment to drawings would be ok.

If it is a company however it would be an adjustment to his directors loan account and there would potentially be a section 419 tax issue if the loan account was overdrawn and potential p11d issues. If it is a company post on here and someone will advise.



-- Edited by adi2402 on Friday 21st of May 2010 12:53:13 PM

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I sometimes set up the petty cash account in Sage (1230) as a cash/owners funds type account and then journal to capital introduced/drawings to deal with this kind of thing for sole traders. You can pick up any expenses paid here too.

Hi Adi, S419 has a new name nowadays ( I think its S455 but not totally sure), bit of a nuicanse but probably best to get used to it!

Rob

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Rob
www.accounts-solutions.com


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Cheers Rob,

I'll have a look at that later. Why o why do they have to keep changing things! I'm getting too old for new things :)

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Forgive the typo's I generally do not proof read. Just lazy I guess!
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