Learn how to record sundry expenses in the UK and explore how small amounts can make a difference to your balance sheets in the next accounting period.
Sundry Expenses Definition
Providing an exact definition of sundry expenses is a bit difficult because the term refers to a variety of small, insignificant expenses that don’t fall under general expenses in accounting.
Larger businesses should track sundry expenses in the general ledger because it’s important that the funds are recorded on the income statement. Every little bit counts when it’s time to close the books.
To fall under sundries, the funds are generally:
- Small expenses
- An unusual or rare expense
- Funds with irregular and random timing
Sundry expenses don’t come up frequently and aren’t regular expenses. For example, if a company has water delivered on a Friday at 12 every week, that isn’t a sundry because the water arrives every week at the same time, making it a general expense.
The same goes for things like office expenses. These can be small amounts, but they go under regular expense accounts because they’re recurring expenses.
Sundry expenses won’t impact a business greatly because they’re small irregular amounts that won’t affect business operations. Still, recording everything in sundry expense accounts allows you to get the full amount of all the small miscellaneous expenses together.
But sundry isn’t only for expenses, there is a sundry income too. This is an outside income that is irregular and small. You’d be surprised how often your business might have small insignificant jobs.
For example, if you work at a pharmacy, selling a single plaster might seem like nothing, but at the end of the year, it’s easy to go through a box or two of plasters. Those still need recording on the financial statements to balance everything out.
Examples Of Sundry Expenses
Let’s take a look at a few examples of sundry expenses in a business:
- Bank charges from a one-time transaction
- A small donation to a colleague’s charity initiative
- Replacement shipping labels
- A retirement card for a colleague
None of these can really be planned for. If shipping labels are damaged and need replacing, there is no way to account for that in the usual expense accounts before it happens. The funds are also less significant, so recording them under sundry expense accounts is perfect.
Recording Sundry Expenses In Accounting
When reporting in a profit and loss account you should report sundries on the left side. The sundry expense journal entry must display a credit to the bank account or cash to balance the ledger entry.
Larger businesses may need to create a separate sundry account in the ledger.
All sundry expenses are added together to get the net sundry expense figure that is recorded on the income statement.
If you’re using accounting software there are usually options for miscellaneous expenses, this is the same as sundries.
While it might seem insignificant at the time, keeping an eye on the sundry expense account is important if you’re dealing with more than a few items. If a pattern emerges then the item is no longer a sundry expense because it isn’t irregular. This would make the items regular expenses.
Sundries in accounting are small amounts coming in and going out of a business. The temptation to simply write it off is there. However, recording sundries plays an important role in monitoring the ins and outs of a business. The line between sundries and regular expenses is very thin.
Hiring an accountant can help you keep an eye on sundries to pick up on any patterns emerging. They can also easily distinguish between sundries and regular expenses by looking at the books.