For information on explaining capital taken out of the business, please see this article.
1. Navigate to the relevant transaction
Navigate to the ‘Banking’ tab at the top of the screen and select ‘Bank Accounts’ from the drop-down menu.
Choose the relevant bank account from the list.
Select the transaction that you would like to explain.
2. Choose ‘Money Received from User’ as the transaction ‘Type
Select ‘Money Received from User’ from the transaction ‘Type’ drop-down menu. Please note that this option will only be available for business bank accounts. You won’t see this option if the bank account has been marked as personal or for a user who has been allocated the role of ‘Accountant’.
3. Choose the relevant user
Select the relevant user from the ‘Received from’ drop-down menu.
4. Choose the appropriate transaction ‘Category’
The item you need to select from the ‘Category’ drop-down menu depends on your business type.
If your business is a sole trader, partnership or LLP, select ‘Capital Introduced’.
If your business is a limited company and the director is buying shares in the company, select ‘Share Capital Introduced’.
If the shares were bought from the company for more than their par value, you'll need to split the transaction between the par value and the premium value. Then, explain the par value as ‘Share Capital Introduced’ as detailed above and the premium value as ‘Other Money In’ for the transaction ‘Type’ and ‘Share Premium’ as the transaction ‘Category’.
5. Explain the transaction
Once you’ve selected the appropriate category, select ‘Explain Transaction’ to complete the process.
If you have more than one transaction that you need to explain as capital introduced from the same user, tick the checkboxes to the left of the relevant transactions and select ‘Money Received from User’ from the ‘Type’ drop-down menu in the panel on the right-hand side. Select the relevant user from the ‘Received from’ drop-down menu, the appropriate category from the ‘Category’ drop-down menu and select ‘Explain [X] transactions’ to explain all the selected transactions in the same way. Remember to include an appropriate description for the selected transactions. If you leave the ‘description’ field blank then the transactions will be given the original descriptions that came through for them via the bank feed import or bank statement upload.
For more information on explaining multiple transactions at once, please see this article.
Regardless of which option you choose, a record of the bank transaction(s) being explained will appear in your Audit Trail report.
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