If your business is a shop or a café, you might use a till. Here's how to deal with cash takings from a till in FreeAgent.
The best way to manage till takings is to add a second bank account within FreeAgent.
Navigate to the ‘Banking’ tab at the top of the screen and select ‘Bank Accounts’ from the drop-down menu.
From the 'Bank Accounts Summary' page, select 'Add new account' and choose 'Bank Account'.
Call it something like 'Till Account' and don't tick either the 'This is a personal account' or 'Make this my primary account' boxes.
At the end of each day, you should use this account to record your cash takings.
Sales
When recording sales, choose the appropriate rate of VAT or enter the sales amount. If you're unsure which VAT rate to select, please ask your accountant.
If you sell goods with different rates of VAT then you have two options:
- Enter each day's sales as one total transaction, choose 'Amount' from the VAT drop-down menu and enter the amount of VAT you charged for all your sales
- Enter a separate transaction for the total sales you have made at each VAT rate. Your till's Z report should show you this.
If and when you bank the cash in hand into your business account, explain this as a bank transfer from your till account into your business account.
Dealing with fees
If your merchant services provider deducts a percentage as their fee, you can record this cost by splitting the transaction to show the charges deducted. You should be able to get the exact amount they deducted from the payout report / statement of account.
To split the transaction, select 'More Options'.
Select 'Transfer from Another Account' from the 'Type' drop-down menu and overwrite the amount in the ‘Value’ field with the full value of the payout before charges were deducted. For example, if the full amount was £100 but £10 was deducted as a fee, enter £100 in the 'Value' field.
Select ‘Create New Explanation' at the bottom of the screen.
You'll see that FreeAgent has put a new payment of £10 in, to make the accounts balance match the bank statement balance, which you can explain to the relevant category. The Till account will also show that £100 has left the account.
Purchases
If you make any purchases for the running of your business with cash from the till, enter this as a payment from the till bank account, selecting the appropriate category. You can always set up more categories if you need to.
Reconciling your till account
Your aim is to make sure the figure in your FreeAgent 'Till Account' agrees with what is in the till at the end of each week.
Find out more about how to deal with cash.