Splitting Transactions between Personal and Business
McBAIN
Member Posts: 2
Hi, I'm trying to work out if there is an easier way to split the costs which are part personal and part business.
At the moment the transaction is on my personal account but is part business, e.g. my car lease payment which is currently 50% business, so I add the Owner investment/drawings portion on the personal transaction and do a journal entry on the business side, this is all good but requires me to get out my calculator and work out all the specific numbers for half of the payment, then the tax component etc and enter all the dollar values.
I've only just started my business and 50% business usage is an estimate, I can already forsee the administrative nightmare once my log book tracking is finished and if the percentage is say 60% then I will have to go back through and manually adjust hundreds of transactions and sub components on the business and personal transactions re calculating each again manually in either excel or with a calculator.
Is there a better way?
It would be awesome if on the personal transactionI could just assign a business percentage and have it automatically figure out how much is owner investment/drawings, that would save me needing to get out the calculator or run a separate spreadsheet.
It would be even better if when I did that I could tell it which business it related to and that automatically created a journal transaction in the business that I could just go and adjust the categorisation of.
It would also be great if the journal transaction could account for tax (without me manually having to get my calculator our and figure out the numbers to enter in a separate debit component)
Those are just ideas, am I missing something that could make this easier with current functionality? I'm operating as a sole trader which means just about everything I do relating to my car payment, insurance, fuel, cleaning etc are split between me and my business.
Comments
Hi @McBAIN . Do you have separate accounts for business transactions and personal transactions or do they share the same account? If you're sharing the same account, what you can do is input these transactions in the Business side, split the transaction (an option available in the transaction window), and then categorize one of the sides as Personal > Owner Investment/Drawings. You can then categorize the other as you would in your business, and you can add tax as necessary.
Hi, I'm new to wave and I'm having the same issue in terms of my utility payments...Every month my internet bill is $50 and I'm trying to figure out how to record $25 of it being a business expense and marking the invoice as paid.
Do I enter the bill as $25 dollars and mark it paid? Do I take $25 out of Drawings and note to pay cable bill under personal account? Or do I do a journal entry and if so what would that entry exist of since you can't really have a personal account added that separates the balances of business/personal accounts? Lastly, how can I just record the total bill amount and show half paid per the business and half paid per personal without is showing a full $50 decrease to my account balance in wave?
Hi, I'm new to wave and I'm having the same issue in terms of my utility payments...Every month my internet bill is $50 and I'm trying to figure out how to record $25 of it being a business expense and marking the invoice as paid.
Do I enter the bill as $25 dollars and mark it paid? Do I take $25 out of Drawings and note to pay cable bill under personal account? Or do I do a journal entry and if so what would that entry exist of since you can't really have a personal account added that separates the balances of business/personal accounts? Lastly, how can I just record the total bill amount and show half paid per the business and half paid per personal without it showing a full $50 decrease to my account balance in wave?
Hey @TaxGirl !
If you are creating a bill in Wave and marking it as paid manually, as you may know, you won't be able to split the bill payment as it would then mark your bill as unpaid. The only way to record this in Wave is by marking it as paid, leaving the transaction as is, then creating a separate Owner Investment transaction into the business account that paid the bill in full. Another workaround would be to create 2 separate bills ($25.00 each) and allocating the payments accordingly.
I suggest reaching out to a professional CPA to ensure you record this as accurately as possible.