Recording a business expense where a proportion is for private use.

Recording a business expense where a proportion is for private use

Some expenses incurred by a business may not be totally used for business purposes. For example, a business operating from home may use the telephone for business 80% of the time and the other 20% is privately used. Therefore, the amount of GST credit claimed for that expense needs to be adjusted.

To set up an account, so this calculation automatically occurs with every transaction related to this particular account:

Click on the Chart toolbar icon
Click to highlight the account for which you wish to allocate a personal use percentage
Click on the Edit button
In the box GST Private Use % (only for part business expenses) type in the percentage amount this account is use for personal purposes. (Consult your accountant if you are unsure as to what percentage you should claim.)
Click on the OK button

Example of entering a cashbook transaction using an account that has a GST Private Use % attached to it:

If you Edit the above transaction you will notice that Cashbook has automatically calculated the private use component and proportionately allocated amounts to the correct accounts:

Article ID 1235