Allocating Payments From The Small Business Grant Fund
Figuring out where to put them ...
Posted by Alison Mead on 27/04/2020 @ 8:00AM
With all the new help coming out for small businesses, it can be difficult to know where to put these payments when you do your bookkeeping. One such example if the Small Business Grant Fund ...
How does a small business allocate grants and loans in their bookkeeping?
copyright: nonwarit / 123rf
When I was doing a clients bookkeeping this week in Xero, there was a £10,000 grant that has been paid to them already, and I needed to know what it was and where to put it in the accounts.
If something is a loan and will need to be paid back then an account code will need to be added in the current liabilities. It will be best to separate those related to COVID-19 to their own codes so you can keep track of them.
"Loans will need to be paid back so you need to be very clear if the money your client has received is a loan or a grant!"
The £10,000 I saw come into my client's bank account was from the Small Business Grant Fund and this will need to be included in the profit and loss account as income. Unless more information comes out to change this, we assume this will be taxable as such.
For my client, I created a new income code in the profit and loss account to allocate the funds to so it is very clear to their accountant what it is when it comes to producing their year-end accounts.
Until next time ...
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About Alison Mead ...
Alison loves bookkeeping and supporting bookkeepers. She has been helping clients to be better bookkeepers in Sage 50 for over 24 years and has been Xero Accredited in accounts and payroll for a number of years too.
She specialises in a very unique hand-holding method of training, helping bookkeepers and business owners to use their accounts software as and when they need support in setting up and producing their invoices, reports and financial information.
Alison combines her role at Silicon Bullet with her Forever Living network marketing businesses and is often to be seen at business networking meetings as she likes to keep busy.
You know what they say: if you want something done well ask a busy person!
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