how do i account for cheque made out to cash

thetourist

hi - i am not particularly accounting literate and could do with some help with entering a transaction ( i use sage instant ) i went to pick up a piece yesterday that i needed in a hurry. when it came to paying for it the seceratary insisted i paid cash ( which i found a bit odd in itself - this is a large engineering company - i think because it was a small one off piece they assumed i'd pay cash) . Anyway i didnt have time to argue and as i didnt have enough on me, i made a cheque out to cash and didnt put their name on the cheque or stub (as instructed) . Personally i dont care if they want to avoid tax or not but i dont know how to account for this money on sage as i really want everything on there to add up ( just for my own sake as i get confused enough already with it). What is the best thing to do. Thanks in advance:eek:

ps i am supposing i just enter a bank payment for the ammount and just enter something generic in the details section, but what would i do for the nominal codes and tax codes sections.

dooloo

if you paid in cash, it is likely that you did not receive an invoice and hence you cannot claim back the VAT. Therefore just post the cheque like you would post a cheque for wages or insurance. Straight to the nominal ledger, not through a supplier account

thetourist

thanks - yes of course i didnt get an invoice and i wasnt going to put it through a supplier account, but do you know what nominal code i should use for it

kluivert

Option:

Put it through a supplier account and therefore will debit the purchases, as an invoice.
Then credit Bank with the cheque and Debit the supplier account for payment of the said invoice.

Or

As above, debit materials (or whatever the expense was) and credit bank.


It sounds like the receptionist is stealing from the company to be honest.

If you purchase materials from a company insist on a Vat invoice and only make payments to that company. Go and put the name of the company on the stub and what it was for. Let other companies worry about themselves and there operations, you make sure that you look after your own business.

ircoha

thetourist wrote: »

...... Personally i dont care if they want to avoid tax or not ...........

In my opinion you should. I would ask your bank for a copy of the encashed cheque so as you have it on file.

In addition, with out an invoice, do you intend including the amount as an expense for tax purposes. If u do and you have a tax audit.....

thetourist

ircoha wrote: »

In my opinion you should. I would ask your bank for a copy of the encashed cheque so as you have it on file.

In addition, with out an invoice, do you intend including the amount as an expense for tax purposes. If u do and you have a tax audit.....

well the company is not a supplier as such - i just bought somehthing from them ( and wont be doing so again probably ) - so in that sense i mean i havent got time to be concerned about it -

ircoha wrote: »

In addition, with out an invoice, do you intend including the amount as an expense for tax purposes. If u do and you have a tax audit.....

i think i actually will put it through as an expense - i figure that if i have an audit the worst that would happen is that this particular item wouldn't be allowed. i mean it's not illegal to pay for goods by cash, is it ??

thetourist

kluivert wrote: »

It sounds like the receptionist is stealing from the company to be honest.

yes it does - however there were three of them and the boss was on the phone as well - if it was a small two bit operation then i mighnt be surprised but this is a large firm with i guess 50 employes or something .

i keep good tracks of everything i do but i was in a pickle that day i hope i dont regret not making a fuss ( well actually come to think of it i did put my foot down - originally they all wanted me to make to cheque out to a bogus name - now that's a LOVELY STORY :eek: )