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Problems with paying long outstanding expenses.
I set up my company in January. After adding a number of expenses stretching from then to now I've been attempting to make a payment against them. I've calculated my total expenses to date as £1311.52, but when I make a payment for that amount the system comes up with a negative balance owed of -1,012.77.
I think this has got something to do with paying expenses across multiple tax years.
Help?
I think this has got something to do with paying expenses across multiple tax years.
Help?
I’m frustrated
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Inappropriate?Hi
Could you check that the FreeAgent Start Date you have set for your company is on or before the date of the earliest expense? You can find this date on the Settings / Accounting Dates page.
The FreeAgent Start Date allows you to use FreeAgent without having to add in lots of historical data. However, since you only set up your company in January it makes sense to put everything in, so the FreeAgent Start Date should probably be the same as the Company Start Date.
It's worth mentioning that if the user in question had incurred expenses before the company was formed, Opening Expense Balances can be entered in the Home / People / Edit User page.
Let me know how you get on.
I’m happy
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Inappropriate?After entering the balance in the Home / People / Edit User page, FreeAgent doesn't seem to recognize this as expenses needing payment. Should FreeAgent be able to pay this as part of a Smart User Payment, and if so, shouldn't it count against my operating profit (and hence my tax liability?)
Thanks, -
Inappropriate?Kian,
FreeAgent should be able to recognise this opening balance as needing to be paid from a SmartUserPayment (if not that's a bigger problem;-<)
But the date the expenses are considered from an accounting point of view are the date they are incurred and the date they are repaid is kind of irrelevant. So you would need to enter the individual expenses even though they are pre-start-up.
FreeAgent will include them as counting against your operating profit for your first year of trading, and you'll need to set your expense opening balance to be the total amount of those expenses (otherwise you'll see a negative amount owed prior to the first pre-start expense.
So by way of an example (since the explanation above is pretty poor!), say you'd paid for two things pre start, one £200 and one £400.
You would enter those in with their actual purchase dates, but also enter an opening balance of £600 since that is indeed what you were owed at startup.
Make sense?
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