I am not an accountant! Simple Invest is a great system. If I send $5000 to a company for a share purchase plan, one side of the transaction is obviously the bank account but what code do I use for the other side please? I have tried 99900 Manual Suspense but the transaction screen gives me red and orange flags! I cannot allocate it to the shares because $2000 will probably be returned to me a month later. Does anyone have a way of doing this which works with Simple Invest Chart of accounts and is an acceptable accounting practice please?
I dont use Simple Invest, but i am guessing its kind of the same as BGL.
You could still allocate it to share purchase, and then when the refund comes in you can allocate it as a return of capital.
In this case, what you would do is Frist when you send the $5000 you would record the journal as below
Debit the investment account with the number of units and credit the bank account
Debit 77600/XXX $5000 (In the units column put the number of units you get part of the share purchase plan)
Credit 60400/XXX $5000
Next, when you receive the cash back you would record the following
Debits 60400/XXXX $2000
Credit 77600/XXX $2000 (In the units column put 0 as the units) (This is like treating it as a return of capital)
Alternatively, if this is a share purchase plan relating to an ASX listed investment you could automate these journals via the corporate actions screen. Please see below help file.
If you need any further assistance please feel free to contact BGL support.
Despite the red flags there is technically nothing wrong with what you did.
Alternatively, set up an asset account ‘share purchase plan’ and use that for ‘the other side’. Next time you participate in another share purchase plan you can use that same account again. Any refunds go back from there to your bank account and the actual amount used is than allocated against the number of shares you purchased.
Thank you very much. I like the asset account idea although all three responses would obviously meet my needs.