Personal funds to set up business
Hi,
setting up a new business and all purchases of assets and expenses have come from a personal account and the business account has a $0 balance. How do we enter where the funds came from? Do we need to add our personal account that we used to our chart of accounts or is there another way?
Thanks
Hi CJG1
Thanks for your post. How owner contributions are recorded typically depends on your business type, ie, posted to an equity or liability account, so this is something I'd recommend checking with your accountant.
Having said that, one way to handle this situation is to create a Director loan liability account, make sure the Account type is Credit card. When recording supplier payments or Spend money transactions select the Director loan liability account in the Bank account field. This will ensure the purchase is correctly posted to the applicable expense account and track the amount owed to the director without affecting the business bank account.
Please let me know if you need further help.
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