enter purchases - Consultant Accounts

Go to content

How to enter purchases into Orderbook

Entering your purchases as you go along will save you a vast amount of headache at the end of the year.

By entering your purchases you will automatically assign them to the correct category by choosing the correct expense type.  Choosing the correct expense type at this stage may not be necessary for HMRC tax purposes unless your earnings are over a certain level.  However in doing this now, you can also see how much you are spending on certain items, whether that be telephone, stationery or other expense types.

Most purchases are simple to fill in.  The date, supplier, information about the product purchased, and the amount are all available on the invoice.  Most things you purchase will be vat able.

The only difficulty you will find is when purchasing products from Cambridge Manufacturing.  This is because some of the products of vat able and some are not.  So you will need to enter those items into the purchases columns correctly.  To do this you will need to split the two different items into two different lines on the purchases column.  The first column will be all the vat able items and the second non vat able.  This is very easy to do as a Cambridge Manufacturing invoices have a column telling you which items are vat able and which are not.  So the first job will be to highlight all the vat able items on the Cambridge Manufacturing invoice.  Add these items together including the VAT total and write that figure on the bottom of the Cambridge Manufacturing invoice.  I always write the word vat able next to that figure.

Next I subtract the vat able figure from the total amount of the invoice.  This will give you the non-VAT able amount.  Write this figure at the bottom of the invoice as well.  Write the word non vat able end next to that figure.

Now go to the purchases section and fill in the date, supplier, item, and expense type P.  In the gross column the vat able amount from the bottom of your invoice.  Put the letter Y in the VAT column.  If you have added up correctly by that amount will be the same as the total on the bottom of the Cambridge invoice.  In between the date and the supplier of that line is a reference code write that reference code next two the amount on the vat able items.

On the next line of purchases, fill in the date, supplier, item, and expense type P.  Once again in the gross column answer than on vat able item from the bottom of the invoice and put a N in the VAT column.  Once again in between the date and the supplier of landline is a reference code, right that reference code next to the amount of non vat able items on the invoice.
By putting the reference code on the invoice, it makes it traceable should you need to find it again.
With this example we have used the letter P to put the gross amount into the products category.
A purchase could quite easily be car expenses C or telephone T depending on which a letter we put in the expense type column.

If you're not sure which type of expense your purchase is, there is some help on the screen.

If you look in the boxes of headings of expense types, you will see a small red triangle to the top right hand corner of that box.  If you hover your mouse cursor over the top of that red triangle an information box will appear giving you the information as to what should be included in that expense type.

Once you have completed your sales and purchases for the month, when looking at the balances sheet, you will find a slightly more accurate representation of your percentage profit for the month and the estimation of tax to be paid.  This however is still not totally accurate if you are claiming for household expenses.  

Some of these expenses may not be available to you until the end of the year.


Back to content