Hello, I’m new to Manager (and not an accountant) and would like to know the best way to record online business purchases (paid for directly with the business’s bank card) for a UK business. Do I:
(1) Raise a purchase order (which isn’t sent the supplier), create a purchase invoice against this purchase order, and then spend money against this invoice,
or (2) Simply ‘Spend Money’ from the bank account?
For record purposes, which way would the HMRC/an accountant prefer to see it done?
Simply spend money from the bank account. Purchase invoices tab is when you make a purchase which will be paid later. If you pay at the time of purchase, then no need for purchase invoice.
The same goes for purchase orders. You are not sending them to suppliers, so why bother?
As far as HMRC is concerned, both methods are technically correct. It’s just that when you start passing all purchases through purchase invoices tab, you are just creating more work for yourself without any benefit.
Thank you - that makes perfect sense.