Ok that's all clear thanks Could you pls how the repayment will be done to the directors loan account and how would I reconcile the payment in our bank statement in Xero?
Thank you, this video was very helpful. 2 questions. 1.What is the next step? do I make the payment from business account to my personal account and match those transaction? 2. if we can input invoice straight onto zero, what is the benefit of hubdoc ?
Hi it’s entirely optional if you get paid back - sometimes a new business will not have the funds to do so. But if you do get repaid then code the payment on the bank reconciliation screen to directors loan. Hubdoc (and others) are designed to save you time with data entry, picking up information automatically. In my experience you should get to know Xero first then decide if you need to save time. For 30 invoices per month, I would so very little benefit. For hundreds then definitely worth looking at.
Great videos, I'm currently considering Xero, not yet signed up. I am employed part-time, but also have a sole trader business. At the moment, my expenses are much bigger than profits and I use personal funds to supplement the business purchases, without paying these back to my personal account. How do I enter these payments, and how do I reconcile these?
Hi Marion, The problem with paying out of the Director's Loan Account means it shows as £0 and so I now cannot reconcile it with my business bank account when I pay myself back into my personal account.
Hi, thanks for the video. You explain how to pay personal expenses via Manual Journals or by creating a Bill. However, why can't this be done as a "Spend Money" transaction?
How does the owner physically get their money? I have a similar situation however I have transferred the cash from the business bank account to my personal account to compensate for the cost. Do I just reconcile the spend to the supplier (me) as per usual and not do the steps outline here?
Wonderful video. Quick question which may sound obvious but wanted to ask anyway. If you then reimburse the personal expense from your business account which is auto linked to Xero - How do you reconcile correctly
I get both methods (bill or manual journal) but how is the transaction (where money is paid from company account to personal account) reconciled? Let's say I purchased paper from Tesco for $5, I create a bill or manual journal to record it. I then transfer that $5 to my personal account, but how do I reconcile this transaction?? Thanks for awesome content btw!
Hi there. thanks for the explanations in the video, but how do I actually get the money back from the company? If I pay back money i have spent to myself from the company bank account, how do I reconcile this?
Ha, just noticed TH-cam suggested I respond with 'not possible!' Here's the answer you might prefer ... When you enter the expense transaction in Xero it's a debit to the Expense code which lands up in your profit and loss account and credit to your Director's Loan account which is a credit (i.e. liability) on your balance sheet. So we have recorded that you are due this money from the company. And if you pay it back, you simply code the bank payment to the same code e.g. Director's Loan account. If you pay yourself the exact amount, then the liability will reduce to nil.
Marion, in the first example, is VAT purposely set to "No VAT" against the Owner's Funds Introduced entry? What is the reasoning for that? You're still being charged VAT by the store, aren't you?
Hi, yes that’s correct. For every accounting transaction we will have a debit and a credit entry. If there is VAT it will either be attached to the debit or credit. In this instance, the VAT amount is attached to the cost from the store and not the credit to Owners Funds.
Hi Marion, for business expenses paid by personal account, I uploaded the transactions and reconciled, but now need to post a manual journal DR personal account, CR Owner funds introduced. However, I cannot see the "personal account" in the drop down to post to as it's set up as a "bank" in the Chart of Accounts. Is there a way to do this? sorry, hope makes sense. Many Thanks
Hi Marion, your videos are so helpful. I'm learning as I go and refer to your videos often to help me. I'm doing fairly basic bookkeeping for a Company, the Accountant has asked me to update Xero before she can do the VAT. Trying to save my boss the Accts costs i'm having a go, but i'm not an accountant. I have to remove loads of user generated transactions which I unfortunately did and reconciled so will remove & redo, fingers crossed. I sometimes wonder with Accts how much do they actually do? She has sent a spreadsheet showing duplicates on the Bank transactions but when I open the recon report I cannot see them at all. What am I doing wrong? Thank you in advance.
Does anyone know if there’s a way to default dr/cr codes so when a certain person submits an expense claim it automatically recognises their specific dr/cr code?
Hi Marion, I have made a mistake and have been using 2 bank accounts belonging to 2 separated businesses on 1 Xero subscription-platform. I have now realised that it confuses my reporting and would like to take irrelevant bank account out. I have voided irrelevant transactions in my P&L account and my reports are now in order. Can I easily export irrelevant bank account out onto separate Xero subscription together with account transactions that have had invoices attached to save myself starting from scratch please?
Hi Marion, how do you enter a business expenses/invoice that has been paid by a member of staff with their personal funds, and the company has then paid the money back to their bank? How would this be reconciled? Thanks
If this rarely happens then I would enter the invoice as normal, then mark it as being paid from the Suspense Account. You will need to ‘enable payments’ in your Chart of Accounts to do this. Then when you refund the employee, code the payment to Suspense. Your Suspense Account balance will then be nil.
Hi Marion. Great video! Just one question. I'm a one man Director/Employee Ltd company and I pay myself the daily subsistence rate. Would this be the same method to claim that back? I've always just used Bills and never used directors loan account for that. I just reconcile the transactions to 'Travel - National' once I've paid myself from the company bank.
Hi Marion, you’ve been invaluable in my journey thus far with Xero. (I cannot believe you are a fan though, I detest it!) I am currently getting my head around expenses but don’t have the ‘manual journal’ option available. Is there another option for me?
Ha ha can I not get you to change your mind? I started with Xero 10 years ago and it was ahead of the game then. Now it’s just a tool that if used well does the job. If you don’t have Advisor status you can still get to Manual Journals - I’ve got a video explaining how. You need to go to reports then the journal report and there’s the option to add a new journal there.
Hi Marion, great info in your video and thanks for making these! At the beginning you mentioned if this is a regular occurrence I should look into Xero's expense module, but I much prefer the functionality of sending pdfs in as bills and the auto recognition on bill details. From a HMRC point of view would it make a difference if I am using the bill directly vs expense claims? Also if I do use expense claims, can I also use your method to credit the owners fund introduced for each expense and pay myself back a lum sum later? This is for a sole trader situation in case it matters. Many thanks.
@@XUSolutions Thanks for confirming. For record keeping, would I need to keep the statements of my personal bank accounts which the purchase was made on, or just having the receipts attached to Xero is sufficient?
Hi Marion, your videos are really helpful! I have a question, I've recently entered into a Franchise and have paid the initial fee out of my personal account, how do I enter this in Xero? Many Thanks
Hi Marion, I'm new to Xero and your videos have been very helpful so thank you very much. I have a question though, I'm a building sub-contractor and was wondering about claiming expenses on tools through Xero, for example how do I claim the VAT on a purchased drill. Do I just create a bill and then mark it as paid for it to show in my VAT return? Thanks again for your videos and any help you can give.
If you're unclear about what you are doing, make sure you get professional advice on your Xero account. If you are VAT registered, then you need to put your VAT registration details in the financial section. Then enter the bill like you said in Xero. The VAT reclaim will then appear on your VAT return - at the date of the invoice if on the accrual scheme or at the date of payment if on the cash scheme for VAT.
Hi Marion, thanks so much for this video. I have gone ahead and followed everything in scenario 1and it has worked. I stupidly paid for lots of business expenses using my personal account and have started entering them as Director Loan, etc just as you have instructed here. However, they then present in Xero as a "Bill" and as a Starter subscriber, I am only allowed 5 "bills" per month. Have I made a mistake or is this indeed the case? ie; manual journals created and attaching a receipt, like you have here in scenario 1, are considered "Bills" and therefore only 5 allowed on a Starter Xero subscription? Or am I missing something re what is considered a "bill"? Thanks so much for any advice!
Ok I wasn’t aware that manual journals count towards the 5 bill quota - but hey every day is a school day! You have a couple of options - you could upgrade for 30 days to get these transactions entered, then downgrade immediately. Alternatively, enter I journal per month with individual transactions on separate lines.
@@XUSolutions oh Marion you really are a very generous soul for getting back to me! To be honest I am not 100% sure that manual journals do count toward the bill quota, as I stopped at 4. I just assumed this to be the case once they popped up as “bills” in Xero. Just wanted to clarify that, as I’m probably not the most reliable or knowledgeable sub teacher to turn up on this particular school day! 😅 I shall now push through to 6 (naughty me!) and see what happens but your tips and work arounds are indeed very much appreciated and you really are super fabulous to have taken the time to reply to me and all the questions here!! Have a lovely rest of your week and Merry Xmas and Happy New Year to you and yours 🤗
Hello Marion, just seen your you tube lessons on how to use Xero and is really good! I would like to know how much it will cost me please maybe for a one or 2 days training please ,I have done it before but was not too confident in it please can you help.thanks. My name is Dee.thank you
I spent all day yesterday looking for help on line! Xero help is too vague. Thank you!
I just subscribed because this is exactly what I was looking for. Yay!! Thanks for your help and keep making videos :)
Always happy to help :-)
Ok that's all clear thanks
Could you pls how the repayment will be done to the directors loan account and how would I reconcile the payment in our bank statement in Xero?
Exactly my question!!
thank you for makng these videos - your channel has helped me learn this program.
😊
@@XUSolutions how to code bakery expenses in xero
Exactly what I needed thank you. Saved me a lot of time.
You're welcome!
Excellent video. Many thanks
This is a really great video, it was really helpful. Thank you!
You're very welcome!
Amazing explanation! Thanks so much for your video
You’re welcome Kirsty
Thank you so much.
You have saved me stress and money
Ah that’s brilliant
Thank you, this video was very helpful. 2 questions.
1.What is the next step? do I make the payment from business account to my personal account and match those transaction?
2. if we can input invoice straight onto zero, what is the benefit of hubdoc ?
Hi it’s entirely optional if you get paid back - sometimes a new business will not have the funds to do so. But if you do get repaid then code the payment on the bank reconciliation screen to directors loan.
Hubdoc (and others) are designed to save you time with data entry, picking up information automatically. In my experience you should get to know Xero first then decide if you need to save time. For 30 invoices per month, I would so very little benefit. For hundreds then definitely worth looking at.
Thank you for response.
I love your videos... you save my bacon on a daily basis
😊
Great videos, I'm currently considering Xero, not yet signed up. I am employed part-time, but also have a sole trader business. At the moment, my expenses are much bigger than profits and I use personal funds to supplement the business purchases, without paying these back to my personal account. How do I enter these payments, and how do I reconcile these?
Simply, You are awesome
thank u so much
Hi Marion, The problem with paying out of the Director's Loan Account means it shows as £0 and so I now cannot reconcile it with my business bank account when I pay myself back into my personal account.
Hi, thanks for the video.
You explain how to pay personal expenses via Manual Journals or by creating a Bill. However, why can't this be done as a "Spend Money" transaction?
Some people will set up the Director’s Loan as a Bank Account and then you can enter as a ‘Spend Money’ transaction.
How does the owner physically get their money?
I have a similar situation however I have transferred the cash from the business bank account to my personal account to compensate for the cost. Do I just reconcile the spend to the supplier (me) as per usual and not do the steps outline here?
Thank you Marion. Presumably when the business reimburses the Director you would credit the bank account and debit the Director's Loan Account?
Exactly
@@XUSolutions Can you explain how I would do this please? I'm stuck on this step!
Wonderful video. Quick question which may sound obvious but wanted to ask anyway. If you then reimburse the personal expense from your business account which is auto linked to Xero - How do you reconcile correctly
You code it to the directors loan where it was entered against originally
@@XUSolutions wonderful thanks so much
I get both methods (bill or manual journal) but how is the transaction (where money is paid from company account to personal account) reconciled?
Let's say I purchased paper from Tesco for $5, I create a bill or manual journal to record it. I then transfer that $5 to my personal account, but how do I reconcile this transaction??
Thanks for awesome content btw!
It’s great video I have learnt a lot.
Glad to hear it!
Hi there. thanks for the explanations in the video, but how do I actually get the money back from the company? If I pay back money i have spent to myself from the company bank account, how do I reconcile this?
Ha, just noticed TH-cam suggested I respond with 'not possible!'
Here's the answer you might prefer ... When you enter the expense transaction in Xero it's a debit to the Expense code which lands up in your profit and loss account and credit to your Director's Loan account which is a credit (i.e. liability) on your balance sheet. So we have recorded that you are due this money from the company. And if you pay it back, you simply code the bank payment to the same code e.g. Director's Loan account. If you pay yourself the exact amount, then the liability will reduce to nil.
Excellent. Thank you.
Marion, in the first example, is VAT purposely set to "No VAT" against the Owner's Funds Introduced entry? What is the reasoning for that? You're still being charged VAT by the store, aren't you?
Hi, yes that’s correct. For every accounting transaction we will have a debit and a credit entry. If there is VAT it will either be attached to the debit or credit. In this instance, the VAT amount is attached to the cost from the store and not the credit to Owners Funds.
thank you - very useful
Hi Marion, for business expenses paid by personal account, I uploaded the transactions and reconciled, but now need to post a manual journal DR personal account, CR Owner funds introduced. However, I cannot see the "personal account" in the drop down to post to as it's set up as a "bank" in the Chart of Accounts. Is there a way to do this? sorry, hope makes sense. Many Thanks
You can’t post manual journals to a bank account, you need to enter a ‘receive money’ transaction.
Hi Marion, your videos are so helpful. I'm learning as I go and refer to your videos often to help me. I'm doing fairly basic bookkeeping for a Company, the Accountant has asked me to update Xero before she can do the VAT. Trying to save my boss the Accts costs i'm having a go, but i'm not an accountant. I have to remove loads of user generated transactions which I unfortunately did and reconciled so will remove & redo, fingers crossed. I sometimes wonder with Accts how much do they actually do? She has sent a spreadsheet showing duplicates on the Bank transactions but when I open the recon report I cannot see them at all. What am I doing wrong? Thank you in advance.
Does anyone know if there’s a way to default dr/cr codes so when a certain person submits an expense claim it automatically recognises their specific dr/cr code?
Hi Marion, I have made a mistake and have been using 2 bank accounts belonging to 2 separated businesses on 1 Xero subscription-platform. I have now realised that it confuses my reporting and would like to take irrelevant bank account out. I have voided irrelevant transactions in my P&L account and my reports are now in order. Can I easily export irrelevant bank account out onto separate Xero subscription together with account transactions that have had invoices attached to save myself starting from scratch please?
Importing the bank statements will be easy to do, but there's no alternative but to enter all the transactions again.
Love your videos
Thank you
Hi Marion, how do you enter a business expenses/invoice that has been paid by a member of staff with their personal funds, and the company has then paid the money back to their bank? How would this be reconciled? Thanks
If this rarely happens then I would enter the invoice as normal, then mark it as being paid from the Suspense Account. You will need to ‘enable payments’ in your Chart of Accounts to do this. Then when you refund the employee, code the payment to Suspense. Your Suspense Account balance will then be nil.
@@XUSolutions Hi Marion...would you be able to post a video on how this is done...thanks & much apopreciated
@@tonib4701 not one I've got planned for now
Hi Marion. Great video! Just one question. I'm a one man Director/Employee Ltd company and I pay myself the daily subsistence rate. Would this be the same method to claim that back? I've always just used Bills and never used directors loan account for that. I just reconcile the transactions to 'Travel - National' once I've paid myself from the company bank.
You can do it how I show you or by your method - either way is fine.
What about if it is partnership? N how to treat when paying back?
If it’s a partnership you will use the capital introduced and drawings codes rather than directors loan
You explain things so well! If the bill is in someone elses name but the goods are exclusively for the business, is this allowed?
Yes but ideally get the bill in the company name. It’s then much easier to justify the expense and will allow you to reclaim VAT if applicable.
Hi Marion, you’ve been invaluable in my journey thus far with Xero. (I cannot believe you are a fan though, I detest it!) I am currently getting my head around expenses but don’t have the ‘manual journal’ option available. Is there another option for me?
Ha ha can I not get you to change your mind? I started with Xero 10 years ago and it was ahead of the game then. Now it’s just a tool that if used well does the job. If you don’t have Advisor status you can still get to Manual Journals - I’ve got a video explaining how. You need to go to reports then the journal report and there’s the option to add a new journal there.
Hi Marion, great info in your video and thanks for making these! At the beginning you mentioned if this is a regular occurrence I should look into Xero's expense module, but I much prefer the functionality of sending pdfs in as bills and the auto recognition on bill details. From a HMRC point of view would it make a difference if I am using the bill directly vs expense claims?
Also if I do use expense claims, can I also use your method to credit the owners fund introduced for each expense and pay myself back a lum sum later?
This is for a sole trader situation in case it matters. Many thanks.
Hi, it's not a problem to enter bills instead of using the Expense module. And for a sole trader, I would happily continue that way.
@@XUSolutions Thanks for confirming. For record keeping, would I need to keep the statements of my personal bank accounts which the purchase was made on, or just having the receipts attached to Xero is sufficient?
The receipts are enough
Hi Marion, your videos are really helpful! I have a question, I've recently entered into a Franchise and have paid the initial fee out of my personal account, how do I enter this in Xero? Many Thanks
I believe you can do the same thing what Marion explained on the TH-cam video how to record your Franchise fee.
Hi Marion, I'm new to Xero and your videos have been very helpful so thank you very much.
I have a question though, I'm a building sub-contractor and was wondering about claiming expenses on tools through Xero, for example how do I claim the VAT on a purchased drill. Do I just create a bill and then mark it as paid for it to show in my VAT return? Thanks again for your videos and any help you can give.
If you're unclear about what you are doing, make sure you get professional advice on your Xero account. If you are VAT registered, then you need to put your VAT registration details in the financial section. Then enter the bill like you said in Xero. The VAT reclaim will then appear on your VAT return - at the date of the invoice if on the accrual scheme or at the date of payment if on the cash scheme for VAT.
@@XUSolutions thank you, I managed to get my head around it last night. Thank you for your help, keep up the good work.
What else to do on a Saturday night?🤔
Hi Marion, thanks so much for this video. I have gone ahead and followed everything in scenario 1and it has worked. I stupidly paid for lots of business expenses using my personal account and have started entering them as Director Loan, etc just as you have instructed here. However, they then present in Xero as a "Bill" and as a Starter subscriber, I am only allowed 5 "bills" per month. Have I made a mistake or is this indeed the case? ie; manual journals created and attaching a receipt, like you have here in scenario 1, are considered "Bills" and therefore only 5 allowed on a Starter Xero subscription? Or am I missing something re what is considered a "bill"? Thanks so much for any advice!
Ok I wasn’t aware that manual journals count towards the 5 bill quota - but hey every day is a school day! You have a couple of options - you could upgrade for 30 days to get these transactions entered, then downgrade immediately. Alternatively, enter I journal per month with individual transactions on separate lines.
@@XUSolutions oh Marion you really are a very generous soul for getting back to me! To be honest I am not 100% sure that manual journals do count toward the bill quota, as I stopped at 4. I just assumed this to be the case once they popped up as “bills” in Xero. Just wanted to clarify that, as I’m probably not the most reliable or knowledgeable sub teacher to turn up on this particular school day! 😅 I shall now push through to 6 (naughty me!) and see what happens but your tips and work arounds are indeed very much appreciated and you really are super fabulous to have taken the time to reply to me and all the questions here!! Have a lovely rest of your week and Merry Xmas and Happy New Year to you and yours 🤗
thank you so much
You're welcome!
Hello Marion, just seen your you tube lessons on how to use Xero and is really good! I would like to know how much it will cost me please maybe for a one or 2 days training please ,I have done it before but was not too confident in it please can you help.thanks. My name is Dee.thank you
Can you send an email to marion@xuacademy.com and I will suggest how I can help you
@@XUSolutions I sent you an email. Thanks.
Xero is so rubbish, I literally have to fight every month with it to get it to do what I want it to
I’m sorry to hear you think this and I agree it’s far from perfect. Is there anything specific you need help with?