Hi
How should you recognise Per Diem? Should it be Cr Income or Cr Expenses (Dr Bank/pretty cash)?
Thanks in advance
Replies (8)
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Per diem
It means 'by the day' and normally refers to a rate of payment. But I think we need to know more, such as 'to whom', 'from whom' and 'for what'.
However I like the idea of pretty cash. Reminds me of advice an older colleague gave me many years ago:
'When it comes to a choice between marrying for love and marrying for money, just remember that the money will still be beautiful in 50 years' time'.
I took no notice of course.
If ...
If the "per diem" is being charged to the customer on an invoice as part of the agreed fee for the services provided, I think it should be included as income and VAT charged on it (or included in turnover for comparing with the registration threshold, if not yet VAT registered).
Different question ?
it's £200 that's been given to our stuff member fo cover expenses for going to India, it's been given to him by an external company who requested he make the trip. Possible future working togather ....should the £200 be Cr Income or Cr expenses.... or doesn't it matter? Thanks
Should you be recording this transaction ?
Wherever you post the Credit, where do you propose that the Debit should be posted ?
A Dr to Petty Cash would mean a receipt into Petty Cash, which is not the case ?
Mechanics
If by "it's been given to him by an external company", you mean that the £200 has never passed through your company, I agree with B Roberts - there is nothing for you to enter.
If you mean that you are giving him £200, but it is being funded by an external company, you will have to recharge the cost to the external company and the answer in my previous post applies, but DR Sales Ledger/Trade Debtors.
I am struggling to understand you
Has the employee given you the £200 which the external company gave to him? In cash?
Have you paid for (or reimbursed to the employee) some expenses to which the external company intended to make a contribution of £200?