Hi,

Second question today! I'm starting a business with £1000 of my own money. I'm buying a laptop for the business and possibly Solar accounts.

My question is how do I set this up? Is the computer an asset and the software an expense? I will pay for the laptop with my visa card and the software via paypal (so it will be a direct debit from the bank account)

Thank You.

Hi Karl,

Yes, you will need to create a new asset account called 'Computer Equipment' and a new expense account called 'Software'. Create two Money Paid Out transactions paid from the Owner's Equity account: one allocated to 'Computer Equipment' and the other to 'Software'.

Cheers,

Hi Karl,

One more thing: the previous advice assumes you want to treat your bank account and visa card as personal accounts. If you want to treat them as business accounts, set the opening balance for them in Solar Accounts, then use them in the 'Paid From Account' when recording the payments.

Cheers,

Thanks Mark, that is helpful. Another question comes to mind is can I put the computer down as an expense or does it have to be an asset?

Thanks
Karl.

Hi Karl,

You will need to talk to your tax office about whether you are allowed to charge it as an expense. I suspect they will require that you record it as an asset, then write off a percentage of the value of the asset each year based on 'capital allowance'.

Cheers,