Table of Contents
Introduction
If you opt for the manual "Manual income & expense entry" bookkeeping process simply utilise the “Record income” and “Record expenses” features. This guide helps explain how to use these features in more detail.
For a video demonstration on manually recording income & expenses, you can watch the relevant chapter in our "Clear Books Free MTD for Income Tax demo" video here.
Record income
On the Dashboard, click on the “Record income” button.
You will then be able to start adding your income using the “Record income” table.
Each row on the table can be used to record separate income. You can remove rows by clicking on the "X" in the column at the end. Make sure to remove any rows you don’t need at the start.
You can add single rows or 5 rows using the links at the bottom of the table.
For each row:
- Enter a date the income was received.
- Add a new contact by clicking on the Add link or select an existing contact you have created in the past. Please note: You can create one generic contact to apply to any income received
- Add a reference number if applicable
- Add a description
- Add the Net value
- Select "No VAT" in the VAT rate
- Select an appropriate Account code
Once you have filled in the data for each row, hit "Save" at the bottom.
Record expenses
On the Dashboard, click on the “Record expenses” button.
You will then be able to start adding your income using the “Record expenses” table.
Each row on the table can be used to record separate expenses. You can remove rows by clicking on the X in the column at the end. Make sure to remove any rows you don’t need at the start.
You can add single rows or 5 rows using the links at the bottom of the table.
For each row:
- Enter a date the expense was incurred.
- Add a new contact by clicking on the Add link or select an existing contact you have created in the past. Please note: You can create one generic contact to apply to any expenses incurred.
- Add a reference number if applicable
- Add a description
- Add the Net value
- Select ‘No VAT’ in the VAT rate
- Select an appropriate Account code
Once you have filled in the data for each row, hit Save at the bottom.
Please note: it is not possible to edit PAY prefixed payments, you will need to click into the REC number, void it, then recreate with the correct values.
Net rental income
When a letting agent collects rent from tenants, they subtract their fees before forwarding the balance to the landlord. It is important to record both the initial rent amount and the deducted fees, which can be explained as a transaction processing fee.
Using this method of bookkeeping, enter the gross rental amount using "Record income" and fees using "Record expenses".
Recording mortgage payments
Mortgage interest is not considered a standard business expense for tax purposes. Instead, a tax credit equivalent to 20% of the mortgage interest (regardless of the tax band) is typically applied to the final tax calculation.
Using this method of bookkeeping, enter the interest portion of the mortgage payments, coded to the mortgage interest account code.
Edit Income/Expense
Should you need to amend an income or expense transaction, you will be required to delete the incorrect entry and re-enter it following these steps:
- From the Dashboard, click on either the "Income" or "Expenses" heading, depending on the transaction type you wish to edit.
- Find the transaction that you have explained incorrectly and click on the ID. Income transactions begin with "REC," while expense transactions start with "PAY."
- Click on the "Void" button and confirm
- Re-create the transaction with the correct details.