can I post an invoice from a finance co for purchase of a vehicle into purchase ledger.?

An invoice from a finance company is not a trader creditors as such,but i believe that the same as solicitors and accountants invoices this can also be posted into purchase ledger and treated on the balance sheet as other creditors. I have been told that this should be posted in the nominal ledger as the finance company is not a trade creditor.

Public Comments

1. If you are using an English accounting system (as in England) a vehicle purchase is in floating assets on the balance sheet with the finance as other creditors.
2. There are a couple of issues here. Is what you are buying on finance 'capital expenditure'? Is it an asset like machinery or a vehicle? I suspect it is. In which case it does not get posted to the purchase ledger. At least not all of it. The VAT or Sales Tax and the finance charges do get posted, but the value of the asset goes into the capital expenditure pot straight away (before the finance payments) and you start to take your capital allowance at the next tax return. You'll need to check what the allowance on a new asset is in that year - this year it was 40% in the UK. The VAT/Sales Tax and interest charges get posted when you pay the monthly amount, so you will need to proportion it out. If it is not a capital expenditure then the it gets posted in the ledger but the accountant will take it out and treat it as a prepayment or some other mysterious title! Weird folks, accountants ;-) Hope that helps!