Cash collections

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Hi Dave

Hopefully I can help.

I assume that you will have an electronic till calculating money received each day including any VAT element (if applicable)?

The best way to handle this is to open a second bank account within FreeAgent and call it something along the lines of "Till Account" and at the end of each day, post your takings.

If your sales all have the same rate of VAT on them then you can enter one transaction only, with type Sales, and choose the appropriate rate of VAT (e.g. 20%, 5%, 0%).

If you sell goods with different rates of VAT on them then you would need to enter a separate transaction for the total sales you have made at each VAT rate. Your till's Z report should show you this.

You could set up different income categories to account for different events: http://www.freeagent.com/support/kb/a...

If and when you bank the cash in hand into the business bank account, post this as as a bank transfer from your Till account into your business account.

If you were to incur expenses etc required for the running of the business with cash from the till, enter this as a Payment from the Till account, using the category Cost of Sales.

You can set up more categories if you need to, to reflect the different kinds of purchases you may make in your business, as described in the previous article.

Your aim is to make sure the figure in your FreeAgent "Till Account" agrees to what is in the till at the end of each week.

There's more information about dealing with cash in FreeAgent here http://www.freeagent.com/support/kb/b...

I hope this answers your question, however if you are still unsure, please do get back in touch.

Regards

Janice

I can see how this works in a shop, if you are just accepting cash, with both standard rate and zero rate VAT. But how do you cope with credit card payments as well. At the end of the day, my till gives me total sales for 20% and 0% VAT, and total taking in cash and by card payments. How can I reflect this in FreeAgent?

Hi Robin

Do the card payments not go straight into your bank account? If so you would explain that money in transaction as Sales: http://www.freeagent.com/support/kb/b...

Does that help?

Regards

janice

Not immediately, but yes. But I don't know whether the card transaction was for std VAT, ) VAT or both, both with the total cash sales. i only know that I took xx in cash and yy in card, and that aa was at 20% and bb was at 0% VAT.

Hi Robin

You would then need to split the bank explanation according to what had VAT and what didn't.

So if it was a total of £2000 and half had VAT and half didn't, then change the amount of the uploaded transaction to £1000 and select VAT on that, FreeAgent will then create another entry for the remaining £1000 which you can explain with no VAT.

Hope that helps.

Regards

Janice

Here's a scenario:

Sales @ 20% VAT = £264.30
Sales @ 0% VAT = £46.50
Cash Takings = £83.95
Card Takings = £226.85

How would you enter that into FreeAgent?

Hi Robin

If everything is being banked into your main bank account you would enter 4 manual bank transactions as Money In > Sales and specify the VAT % on each, or if you upload your bank statements and see a total amount banked you would split the explanations the same way. So when clicking into the unexplained transaction, change the amount to the first amount £264.30 specify the VAT and then save that, FreeAgent will then create an unexplained entry for the remainder which you will then repeat the steps to enter the other 3 transactions.

If you keep the cash you would add them to the cash account which you would set up as another bank account in FreeAgent as detailed in the first reply.

Does that help?

Regards

Janice