Clearbooks - creating a HP Account

Clearbooks - creating a HP Account

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Hi Clearbook users

I know how to create a HP account on excel. However how do i do this in clearbooks?

E.g.

Dr Fixed assets £7000

Dr VAT              £1225

Dr HP Interest a/c £1775

Cr HP Creditor Account   £10,000

Deposit paid £2000

How do i show this in clearbooks? Do I add a bank account (Creditor) for 10,000 then allocate this sum to fixed assets, vat, and interest (all the debits)??? 

The support from clearbooks suggested to create a journal. Is that the correct way? I know Paul Scholes works with Clearbooks, if he could post his thoughts that would be much appreciated. 

Thanks

Replies (10)

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By petersaxton
06th Jul 2015 02:12

You can PM Paul Scholes

Why add a bank account for  a creditor?

You seem to not be accounting for the deposit.

Why post all the interest at the start?

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By User deleted
06th Jul 2015 02:32

Please state ...

... if you are doing an homework question.

The 17.5% VAT is a bit of a give away

As such though, the technically correct way is to account for gross payments as a creditor and interest as a debtor.

The deposit would be debited to HP account leaving £8 gross to pay off over the term.

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By Howard Marks
06th Jul 2015 07:57

Clear Books

I would:

 

Create the loan account (using the bank accounts wizard).

 

Create a bill in the name of the creditor, analysed to FA.

 

Pay the £2k deposit off the bill.

 

Pay the remainder of the bill using the newly formed loan account.

 

Reflect the monthly repayments as inter-account transfers between bank and loan.

 

Adjust monthly (or probably annually most likely) for the interest (either by journal or again by creating a bill and paying it using the loan a/c).

 

That's how I do it in the software I use anyway and I think Clear Books is quite similar.

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By petersaxton
06th Jul 2015 08:31

Interest

If doing any kind of management accounts - which Clear Books lends itself to - I would calculate things like interest and depreciation monthly. It's a bit more work but it makes each months figures more accurate.

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Teignmouth
By Paul Scholes
06th Jul 2015 09:10

Hi

If you follow the bank route for the HP creditor (which is convenient but, technically a bit out the box) then, as you say, just create a payment out of the account to Fixed assets, VAT, HP interest debtor and then treat the £2K deposit as a transfer from the main bank account to the HP creditor bank account.

Similarly, each month's repayment would also be treated as a bank transfer to the same account.

Also set up a monthly journal entry (Tools>Journals>Create recurring) to transfer the monthly proportion of the HP interest, out of the debtor account to an HP Interest code (account type Finance expenses)

The more conventional Journal route would be to create a journal with all the debits you list (make sure you tick the VAT return box) but with the credit to a new HP Creditor code under say non-current liabilities.

Bank payments are then treated as a "Transaction" rather then a transfer, to HP Creditor (you still need the monthly recurring journals).

As well as being more conventional I'd prefer this route as the bank rule works better for transactions than transfers, ie each month the system can recognise the transaction and will default to the HP Creditor account, whereas the bank rule for a transfer, recognises that it's a transfer but not necessarily to the right account, so you always have to double check and correct if it guesses incorrectly.

As mentioned the methods above would apply to any bookkeeping system.  If you have any other queries on CB you are better asking support or posting a question on CB's Community page (where lots of CB accountants hang about), but if you prefer here then sign up to the CB Discussion group.

Cheers

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By Phil653
06th Jul 2015 11:53

Thanks all and especially Paul and Howard for the detailed response.

The 17.5% VAT questions was a bit like homework! I am trying to work with "home work" numbers before using live client info.

I hope Clearbooks comes up with an easier way to do it, Free agent has a user friendly way of doing it via a form.

 

 

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By User deleted
06th Jul 2015 12:39

Just for the sake of it ...

... in IRIS, there are nominal codes for gross HP due in less than one year, 1-5 years and >5 years, and similar codes for the corresponding interest.

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Teignmouth
By Paul Scholes
06th Jul 2015 13:05

FreeAgent?

Hi Phil

Not sure that FreeAgent provides a "form" or automated process. In its guide the process it sets out is similar to Howard's bill method above, but you don't need to create a bill and pay it off in CB as paying directly from a bank account actually generates an internal bill and pays it off in one hit.  You can then attach any scan of the actual supplier's bill to that.

Also note that in FreeAgent you have to create two monthly payments, one for the capital cost and another for the interest (with no prepayment), this is mainly because you can not split one payment between different account codes.

Might be wrong but if there is a form, give us a link.

Cheers

 

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By herry1
14th Sep 2015 12:00

Education

Official magazine to create a customized itinerary for you to list all debts (make sure you check the box for the return of VAT) under a new code of creditors, but HP said the credit would be non-current liabilities. Pass4sure 810-401 Study

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By adam467
21st Jan 2016 10:02

The Journal conventional route would be to create a diary listing all debits make sure you tick the VAT return, 2V0-620 Dumps but credit to a new HP Creditor code under non-current liabilities saying.

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