How to record purchases of softwares
alman
Registered Posts: 3 New contributor 🐸
Hi, need your help for two questions.
I have recently started small practice working from home, before starting trade, I incurred expenses, such as business set up costs etc, and I only started trading from 1st January.
From 1st January I pay all expenses from by business account, that is fine, but how do I record expenses that I paid from my personal account before I had a business account.
How would you record purchase of software, i.e. solar accounts for practice purposes, as the cost is small would you still treat as an asset or expense, if treated as an asset, what rate of depreciation would you use.
Thanks for your assistance.
I have recently started small practice working from home, before starting trade, I incurred expenses, such as business set up costs etc, and I only started trading from 1st January.
From 1st January I pay all expenses from by business account, that is fine, but how do I record expenses that I paid from my personal account before I had a business account.
How would you record purchase of software, i.e. solar accounts for practice purposes, as the cost is small would you still treat as an asset or expense, if treated as an asset, what rate of depreciation would you use.
Thanks for your assistance.
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Comments
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Hi, need your help for two questions.
.............but how do I record expenses that I paid from my personal account before I had a business account.
How would you record purchase of software, i.e. solar accounts for practice purposes, as the cost is small would you still treat as an asset or expense, if treated as an asset, what rate of depreciation would you use.
Thanks for your assistance.
Reading this is concerning!
Are you sure that you want to set up as MIP and do accounts for your clients?
The quiery is a basic level 3 (Intermediate) stuff and lack of basic bookkeeping knowledge is very likely to land a MIP on the indemnity insurance claim
Again the second question is all about Maginality Concept. fairly basic stuff really.
I may sound harsh, but I am worried about your competency to do basic bookeeping0 -
I have to agree with sdv here, these are basic questions.
However:
Expenses paid from personal account
Dr expense
Cr capital introduced.
I don't capitalise anything that costs less than £3-500 so would code Solar Accounts and similar to the P&L.0 -
Agree with them.
I agree with above post but I believe you can overcome that once you start working. I think you are forgetting for lack of practice.
Two ways you can develop in practice:
1. Work Full Time in a Practice and Part time Your work
2. Do your business full time and work in practice part time, one or two days a week.
Or just visit a friend of urs who has an established practice. I think he/she won't mind if you visit him/her on saturdays to help him out.
Ok, Regarding the rate of Depreciation:
If you capitalise it, you will depreciation it over its subscriptions period.
I am not sure about your software. Usually a software licence is bought for a year or so, such as VT T+. So based on this, You can depreciate it over 12 months if you buy one year Licence.
Hope this helps.
Good Luck!0 -
MoneySavingBank wrote: »Or just visit a friend of urs who has an established practice. I think he/she won't mind if you visit him/her on saturdays to help him out.Ok, Regarding the rate of Depreciation:
If you capitalise it, you will depreciation it over its subscriptions period.
I am not sure about your software. Usually a software licence is bought for a year or so, such as VT T+. So based on this, You can depreciate it over 12 months if you buy one year Licence.
Hope this helps.
Good Luck![/QUOTE]0
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