Owner's paid for expenses personally - reconciliation

[stew]

Hello, 

I'm just setting up MYOB essentials for my sole trader business. Before I recieved my company debit card, I bought several things on my personal debit card. I understand the best way to track this is to create a credit card account name "Owner Loans" or something to that extent and use that under spend money. I have done this - what I don't understand is how I reconcile these transactions. These are effectively off record as they have come out of my bank account. I don't want to upload personal statements obviously as most are non business related. Is this reconcilation strictly neccassary or do I just leave those ones not reconciled?

Cheers

[LRBooks61 · Accepted solution]

Hi Stew

no - it isn’t necessary to reconcile these items. 

I often set set up a bank account for clients as owners funds when they use personal funds for purchases.

i then journal it to owners contribution in equity to zero it out monthly quarterly whichever suits. 

You can can do the same with the credit card account you have created.. six of one half a dozen of the other.

enjoy and good luck with your business. 

Lisa

[stew]

Thanks Lisa! I'd wondered whether there would be some issue come end of year if there were items that hadn't been reconciled, but sounds like I'll be fine. Cheers