How to enter transactions for annual corporation account statement

Hi All,

I’m new to Manager and also not an accountant, so please excuse my basic questions. I have a limited liability company which didn’t make any profit in the first year. Now I’m required to file annual account statement and tax return to HMRC. Although the company has a bank account, I have funded the business using my personal credit card since the business has not started making any money yet. We don’t sell things, we provide services.

An example of my condensed expenses are computer equipment and accessories £1500, Training £1000, Marketing and Advertisement £750, Rent £2000, Utility £600. Each of these will have several transactions under them. Total expenses = £5850.

What I need is a balance sheet and profit and loss statement.

I will like to record the computer equipment as asset and then depreciate it. Every other thing will be recorded as expenses.

Please what is the best way to do this? Should I create a Capital account and assign £5850 to it? Or should I set up a liability account and record the £5850 there? If liability account is the way to go, please how can I do this?

For the expenses, I plan to record all the transactions in Expense Claims section. Is this correct?

Am I missing any other step?

Your help will be greatly appreciated.

PS: I’ll use an accountant for future tax returns. I’m doing this myself because the business has not made any money yet.

Whether you should establish a capital account depends upon how you are treated legally in your jurisdiction and whether you are the sole owner. In some jurisdictions, single-member LLCs are treated as sole proprietorships. If so, read this Guide: Simplify equity accounting for sole traders / proprietors | Manager.

In other jurisdictions, LLCs are treated like corporations. In still others, like partnerships. Tax and organizational advice is beyond the scope of this forum. You’ll save yourself more in the long run by consulting a knowledgeable local attorney or accountant than whatever they bill you.

That said, if a capital account is appropriate, and all those expenses predated your operation as a business, it could be acceptable to consider them contributions in kind. But it sounds like you started operations and then have paid expenses as you went along. So in that case, expense claims are the way to record the expenses you’ve made on the company’s behalf. Read this Guide: Use expense claims | Manager.

Read Create reports | Manager.

Understand that Manager prepares no tax returns. It’s accounting software, not tax software.

If you are new to accounting, create a test company first. Read these Guides:

In effect, what you’ve asked is “How do I set up my business?” Manager is a tool, and like all tools, you need to know what the tool is supposed to do before you can use it. To understand double-entry accounting, begin with some education. I recommend

Thank you very much for the quick response.

In the UK, limited liability companies are treated as corporations even when the owner is the only director and employee. Some of the expenses predate my operation as a business. So, I’d probably create a capital account for them and use expense claims for the rest.

HMRC offers free tax filing software. I only need to prepare the balance sheet and profit & loss statement in Manager and then copy across.

Thanks for the links. I’d read them and get started and will let you know how I’m getting on. Thanks again for your help.