Apportioning private and business use on an invoice

Question asked by Audley Archdale 6 years ago

Hello I'm new to CB and I'm struggling a bit regarding the apportioning of private and business use on a mobile phone invoice. I have five phones on a contract in the business name which is a LTD Co. One phone is purely for personal use and i would like to keep it on the contract for simplicity in dealing with the phone supplier. The invoices are paid in full by DD from the business current account. I have a DLA already in use.

I have an account code "Telephone" in which i can apportion the four business phones with the VAT. I presume i need to add a second line on the purchase bill for the personal phone which will be excluded from VAT - what would be the best account code to use for this?

How do i then reconcile between the DLA and the current account in order to reduce the DLA balance?

I guess i could just invoice myself for the personal phone and pay it from the DLA but i feel there must be a better way.

Thanks in advance.

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3 Replies

Hi Audley,

If you are paying for the personal phone using your business account. Raise the bill as normal and pay it with the business account. You can then record a transfer from the DLA to the business account to show the negative balance on the DLA. Finally, simply record a money in transaction to the DLA to represent when you pay off the debt you owe to the company. This would be the simplest way to record this.

As for the account code. I would imagine this would be loans payable (also loans payable for the money in). I would advise speaking to an accountant to be absolutely sure though.

All the best,

Mohamed.

Best answer
6 years ago

Hi Audley,

You're more than welcome! Have a lovely day.

All the best,

Mohamed.

6 years ago

Hi Mohamed,

Thanks for the reply.

Yes that works well. I used the loans payable code for the personal phone and then made a journal entry to clear that from the DLA.

Thanks again, Audley

6 years ago

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