I am a sole trader and I have chosen to use mileage cost rather than submit petrol receipts as an expense. As a new business, I pay myself the mileage when my bank balance permits! My problem is how to record this as an expense/liability but not showing it as having been paid.
The only solution I found was to create a purchase invoice as me as the customer, allocate it to my mileage (liability).
This is rather confusing, but is this right or is there another better method?
Hi Nichola,
No, you should not use a purchase invoice for this. Instead, create a Money Paid Out transaction with the Type field set to 'General Payment'. The Paid From Account should be 'Owners Drawings and Personal Use' and the Allocate To Account should be 'Motor Expenses'.
When the business pays you from the business bank account: treat this as simply a withdrawal of funds by the business owner. Create a General Transaction from the 'Cheque Account' to the 'Owners Drawings and Personal Use' account.
Regards,
