Investments that are also business expenses - how to account for both?

TommyinFiji

Hi everyone,

I just got started with Wave for my sole trader business here in Fiji and there is something I just cannot wrap my head around. Before I had an official business account at a local bank, I already needed to pay a variety of fees and other set-up expenses from my personal account which are essentially business-related expenses.

I now want them to appear as business expenses although there were coming from my private account, i.e. that they are recognized as investments in the company (this is important to show the total level of investment and expenses at the end of the year).

How would I set this best up? Do I need to create two transactions? All the receipts that I have already recorded as expenses plus recording each sum again as a separate owner investment so wave understands it was an investment from my personal account but still counts as a business expense?

Thank you so much and all the best from Fiji,
Tom

Barsin

Hey there @TommyinFiji

I've moved your questions into the accounting technical support section to get more eyes on it from accountants. This is definitely in the accountant territory, but it sounds to me like you'd want to log these under a custom equity account. Curious what you think @Mikeg ?

Mikeg

@TommyinFiji,
Since I'm in the US I do not know how your government accounts for transactions prior to the business. But here in the US, business expenses paid for outside the business are journalized by debit the appropriate expense and credit owner investment.