Hi Jo,

Thanks for using Sage City.

Just to double check is this query regarding Accounting or Accounting Start? The reason I ask is that you are unable to record purchase invoices in Start so that changes the process.

If you are on Start and need to record this the only method to do this would be to record a money in transaction through the bank account and record a money out for the invoice payment as normal. The receipt you record would need to be against 2300 to offset that liability on your reports, the money out payment for the invoice would need to be against your usual purchase code e.g. 5000. I would recommend to set the references for these two transactions as something similar so you are able to know why they are in the Account going forward. In your next bank reconciliation you will need to tick both of these transactions so the balance is still matching with the bank statement.

If you are on Accounting you will be able to either follow the steps above or you can record a credit note against the purchase invoice to the 2300 code for the same effect, but with no transactions showing in the bank account. If this scenario comes up in future I would recommend paying the value back into the bank account of business 1 and paying the supplier out of this account so that your statement will tally up to what is showing on Sage exactly.

I would recommend speaking to HMRC or an Accountant as I'm not sure if how you would need to record the VAT on this supplier payment or which company it needs to be recorded against to show accurately on your VAT return. This may vary depending on your VAT scheme but I'd try to speak to them to make sure it is entered correctly.

Hope this helps. If this has answered your question please click More > Verify Answer.

Kind Regards,

Jack Middleton
Sage Business Cloud Customer Services
Sage UKI