1. Supplier invoices paid by member.
It is always helpful to work out what really happened and then select the various mechanisms offered by the accounting package, that best gives effect to the transactions. You MUST know the desired outcome before you do the entries, then it becomes easy.
Take your case: Firstly, the cc incurred expenses and vat input credits. Therefore you need to DEBIT expenses, DEBIT vat liability and CREDIT the vendor with the sum of the two.
The mechanism for this in Quickbooks is a BILL (Amricanese for a supplier invoice.)
The result of a Bill is a DEBIT to expenses (or wherever allocated) and an amount owing to a Supplier (Creditor), which is the credit.
In this case a member has paid the bills. So the amount is no longer owed to the supplier, but it is owed to the member. That means the supplier must now be DEBITED and the member CREDITED.
One of the methods is to use a pseudo bank account as Dave suggested, with the balance of the account transferred to the members loan account at the end of a period. I frequently do this, but I actually don’t like this method because it records cheque payments in the books of account that never happened. It’s fine and well when I am the Accounting Officer or Auditor, but it is not always easy for a bookkeeper to explain to someone charged with oversight why they did it this way.
Back to reality: The member needs a CREDIT and the supplier needs a DEBIT. I suggest a journal entry to achieve this result.
2. Your rent to purchase dilemma.
If the substance of the agreement (not the form), indicates that it is a finance lease, then you need to do asset / liability recognition at commencement. Compare your agreement to IAS 17
Here is a link to the full IAS:
http://www.iasplus.com/standard/ias17.htm
To give effect to the entry in your case depends on the terms of the agreement because at the outset one needs to know how this thing must be classified.
3. Members remuneration.
At R30,000 per annum there is no PAYE. But I assume the members have other taxable income and if R30,000 is added to it, it will increase their personal tax liability.
If no paye is deducted you would still be required to issue an IT3 which does require registration.
There are only 3 options really, repayment of loan (i) account, (ii) remuneration or (iii) dividends. Only loan repayment has no admin overhead.
Did you like this article? Share it with your favourite social network.