Splitting transactions
Transactions in your bank account may sometimes need to be split out to ensure they're correctly accounted for.
What does 'splitting' mean?
If a transaction in your bank account includes multiple different items, it must be split into separate records by property, category or tax treatment to ensure your accounts are correct.
For example, if you make one purchase on your business card for a mobile phone and charging cable totalling £753, each item will need to be separated out.
A £750 mobile phone is classed as a business asset
A £3 charging cable is an expense
Splitting transactions in the software
Create new record
Select the appropriate category, sub-category and entry for the first item
Fill out the relevant details, including the amount that the first item cost
You'll see the difference remaining at the top, select ‘split this transaction’
)
Select the appropriate category, sub-category and entry for the second item
Fill out the relevant details, including the amount that the second item cost (You can toggle between the different items at the bottom or split again if necessary)
)
Select ‘summary & save’
Once you’re happy, hit ‘save’
)
Types of transactions that need splitting
Different categories e.g. a washing machine (appliances & electronics) and a mobile phone (phone & computer equipment)
Assets & non-assets e.g. a cooker from IKEA (costing more than £200, which is an asset) and some cushions you bought at the same time (expense)
Items that increase value & don't increase value e.g. a payment to an electrician for rewiring (a repair that needed doing - no increase) and installing new sockets (an improvement to the property that increases value)
Replacement & new items e.g. a new microwave, that is a like-for-like replacement of the old, broken one and a new fridge, which is a much better spec than the old one, therefore an upgrade
Different properties e.g. two new showers for different properties in your portfolio
Different date ranges e.g. insurance premium that falls over two separate company years
Billable and not billable to tenant e.g. the cost of repairing a door frame (wear & tear) and a window damaged by the tenant (therefore they'll need to pay to repair it)