The "Owner Investment/Drawings" account should be pre-populated and found under the Equity tab on your Chart of Accounts page. If it's not there for whatever reason, you can recreate it by pressing the blue "Add a New account" button in the top right hand corner of the Chart of Accounts page.
I'm confused regarding the difference between Owners Equity Account and the Owners Investment/Drawings. Does anyone know the difference? As of now, I'm using the latter to record amounts from a personal account to cover the monthly credit card bills. Similarly, whatever personal transactions exist on the credit card. Finally, any payments to myself from the business is logged under the Owners Equity. This approach does not seem to track the extra money being injected into the business when I pay the credit card from personal funds...
How do I record profit taken out of the company? I can see total profit for the last tax year but don't know how to show/record the profit being paid out to the partners.
I tried using the equity account but that didn't take money away from the profit
When it comes to the two different accounts here, each have different names, but will essentially serve the same purpose: whenever a transaction is categorized to one of the two, it will be counted as an equity transaction.
The reason that they are distinct has to do with specificity; if you are investing or taking money from your company, this transaction should appear under 'Owner Investment / Drawings' so that your reporting can reflect the nature of the transaction. For all other situations that require the 'Owner's Equity' distinction, but do not represent a deposit or withdrawal, the other account can be used.
When it comes to using the 'Owner Investment/Drawings' account, here are the 2 primary use case scenarios and how to record them in Wave:
To account for a business transaction from a personal bank account:
Start off in the Personal profile. Categorize the expense (or receipt) to Owner Investment/Drawings. Boom, you’re done on the personal side. Head over to the business profile and add a transaction that affects the appropriate account, and categorize as Owner Investment/Drawings
To account for a personal transaction from a business account:
In the business profile, categorize the transaction that you consider to be a personal expense to “Owner Investment/Drawings.” Head over to the Personal profile and create a transaction that affects the relevant account, and categorize as “Owner Investment/Drawings.”
When I try to categorize an imported bank transaction as personal, it does not give me the option of selecting 'Owner Investment / Drawings" in the equity section. I get a message saying it must be a liability account and the only option is 'Shareholder Loan'. Do these transactions have to be posted manually as a journal transaction prior to reconciliation?
That's odd. Do you mind clarifying the type of transaction you are trying to categorize? Also, do you mind clarifying if you have an Owner Investment/Drawings category on your Accounting > Chart of Accounts page? Feel free to upload a screenshot of what you are seeing on your end. This will help me better understand the issue at hand so I can assist you further.
Still not really following.... Are you saying I have to create a wave personal profile too? I dont want to import anything form my personal accounts. I just want to record 12 transaction (for $484.99) i paid via my non business checking account before setting up my business checking account. Whats the proper way to record so my rev and expense is complete and correct?
I would like to know the opposite, how to record a business transaction that was made from a personal account. On the Transactions page, with Business Checking selected 1) Should the Account that is selected be "Amounts due to Owners"? And 2) the Category that is selected be something like "Supplies"?
Does this effect the Owner Investment/ Drawings? Does it need to effect the Owner Investment/ Drawings? Or is there another step, a journal entry perhaps, to reduce the Amounts due to Owners?
I'm confused by this. As I record money used from my business account for personal draws, reports still show me in the green. Shouldn't that money show as spent...no longer an asset? It's gone yet my reports still show me as positive. Is this accurate?
Comments
Hey @NMN !
The "Owner Investment/Drawings" account should be pre-populated and found under the Equity tab on your Chart of Accounts page. If it's not there for whatever reason, you can recreate it by pressing the blue "Add a New account" button in the top right hand corner of the Chart of Accounts page.
Odd... it wasn't pre-populated. Only had Common Shares and Retained Earnings/Deficit. Nonetheless I added -- thanks a million @JulianP!
I'm confused regarding the difference between Owners Equity Account and the Owners Investment/Drawings. Does anyone know the difference? As of now, I'm using the latter to record amounts from a personal account to cover the monthly credit card bills. Similarly, whatever personal transactions exist on the credit card. Finally, any payments to myself from the business is logged under the Owners Equity. This approach does not seem to track the extra money being injected into the business when I pay the credit card from personal funds...
How do I record profit taken out of the company? I can see total profit for the last tax year but don't know how to show/record the profit being paid out to the partners.
I tried using the equity account but that didn't take money away from the profit
Any help appreciated.
Thanks
Hey there @edmundsecho and @DonV !
When it comes to the two different accounts here, each have different names, but will essentially serve the same purpose: whenever a transaction is categorized to one of the two, it will be counted as an equity transaction.
The reason that they are distinct has to do with specificity; if you are investing or taking money from your company, this transaction should appear under 'Owner Investment / Drawings' so that your reporting can reflect the nature of the transaction. For all other situations that require the 'Owner's Equity' distinction, but do not represent a deposit or withdrawal, the other account can be used.
When it comes to using the 'Owner Investment/Drawings' account, here are the 2 primary use case scenarios and how to record them in Wave:
To account for a business transaction from a personal bank account:
To account for a personal transaction from a business account:
When I try to categorize an imported bank transaction as personal, it does not give me the option of selecting 'Owner Investment / Drawings" in the equity section. I get a message saying it must be a liability account and the only option is 'Shareholder Loan'. Do these transactions have to be posted manually as a journal transaction prior to reconciliation?
Hey @Hawks !
That's odd. Do you mind clarifying the type of transaction you are trying to categorize? Also, do you mind clarifying if you have an Owner Investment/Drawings category on your Accounting > Chart of Accounts page? Feel free to upload a screenshot of what you are seeing on your end. This will help me better understand the issue at hand so I can assist you further.
Still not really following.... Are you saying I have to create a wave personal profile too? I dont want to import anything form my personal accounts. I just want to record 12 transaction (for $484.99) i paid via my non business checking account before setting up my business checking account. Whats the proper way to record so my rev and expense is complete and correct?
I would like to know the opposite, how to record a business transaction that was made from a personal account. On the Transactions page, with Business Checking selected 1) Should the Account that is selected be "Amounts due to Owners"? And 2) the Category that is selected be something like "Supplies"?
Does this effect the Owner Investment/ Drawings? Does it need to effect the Owner Investment/ Drawings? Or is there another step, a journal entry perhaps, to reduce the Amounts due to Owners?
I'm confused by this. As I record money used from my business account for personal draws, reports still show me in the green. Shouldn't that money show as spent...no longer an asset? It's gone yet my reports still show me as positive. Is this accurate?
How to categorize an Owner draw? the only option in Liability account is shareholder loan but this is not money that will be paid back.