Managing a loan between a personal and business account

birdieconsulting62

I run a sole proprietorship and over the course of 2017 I made some loans to my business from my personal account, both are linked to my Wave account. How do I reconcile the loan and repayment amounts between the two accounts?

Any pointers would be greatly appreciated.

Regards

Doug

Sophia

@birdieconsulting62

Hi Doug!

This will involve working in both your business and personal accounts in Wave. Let's look at the business side first, to keep everything organized.

Under your business in Wave, you'll want to categorize the receipt of the loan as income from owner's investment/drawings. Conversely, to indicate repaying the loan back to your personal account, you'll want to enter an expense under your business paid to owner's investment/drawings. Since you've connected your business bank account, you'll see those transactions imported automatically, and all you'll need to do is categorize them.

Under the personal tab, you'd do the same thing, but in reverse! When you made the loan to yourself, you'd categorize that as an expense transaction to owner's investment/drawings. Now that you've paid yourself back, categorize that as income coming from owner's investment/drawings. Again, since you've connected your bank and assuming those transactions have been imported, you'll just need to categorize those transactions.

Let me know if that works for you!

ctexeira

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