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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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?
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.
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.
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.
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
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.
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
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
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.