Issue Dealing with One Debtor, Two Businesses & Personal Expenses
NotAnAccountant
Member Posts: 2
I'm very new to Wave. I have a debtor whereby I use their charge card most months for business expenses for my two businesses, and for personal expenses. The debtor invoices me and sends a monthly statement and the payments fall due 20th of the month following.
When I charge my account I might go into a store, purchase multiple items on the same day. When I get my invoice there will be a combination of items on the invoice - they can be for my main business, my sub-business and for personal use. Probably not the best way to do things I guess.
I uploaded all my transactions for my main business. Included in the transactions are payments to the debtor.
Please, how do I allocate the payments made to this debtor:
1. I need to allocate the transactions for my main business
2. I need to allocate the expenses for my sub-business
3. I need to allocate my personal expenses
Do I do journal entries, and if so - how do I go about doing this in basic steps please?
I have read through some of the threads, but as I'm a complete and utter novice, I need everything extremely step by step and I found myself getting lost and confused.
The debtor doesn't have anything I can upload to Wave, it would need to be entered manually.
If anyone has any hints it would be greatly appreciated. Apologies for the basic knowledge I have. Me and numbers just don't go together. I'm struggling and I'm very late with getting my tax documents to my accountant.
Comments
Hey @NotAnAccountant! Firstly, welcome to Wave! Accounting can be a tough world to step into, so kudos to you for jumping in! When you run your personal and business expenses under one bank account it can be a bit confusing. Generally, any transaction that is for another business or that is classified as 'personal' should flow through an equity account. If you are using a personal bank account to pay for all business expenses and you upload statements, then you can create Journal Transactions to show this in Wave. To create a Journal Transaction head to: Accounting > Transactions > click 'More' > Add Journal Transaction. This Wave guide should walk you through the steps of creating the Journal Transactions and the accounts to use: Handling business expenses with a personal account.
In your case, as there is no statement to upload into Wave, you could create another business for your sub-business in Wave. Then manually enter the transactions for 'Personal' in the personal tab and transactions for your sub-business into the sub-business profile. You can then categorize these transactions accordingly.
As this is getting a bit more complex, I'd also recommend reaching out to an accountant for best practices here, just to be sure you are on the right track!
Thank you so very much for your help. I really do appreciate it. I'm still eyeball deep in paperwork and doing my documentation (late) for my accountant.
This will all seem a bit confusing:
What I have decided to do is for the main business, delete all personal transactions out. Any transactions which are split personal and business I have edited the amount to reflect the business amount only, and then handwritten on my bank statements next to the figure what amount relates to business.
For the sub-business, I'm going to copy my bank statement .csv files, delete any entries which don't relate to that business, and then upload them to Wave and do the same as I have done for the main business.
It's probably not the best way to do it, but I've found this a real learning curve. Just had to cope with it the best I could. I will read over your comments again and will try and get my head around it. Hope I can do it all correctly for next year when I have more time to spend working out the right way.
Thank you once again for your help.