Personal to Business and then Back Again - Help Needed

ClarkeySJ

Hi I need some help!

I have rental income from a property I rent outcoming into a Personal account that I want to move to a Business I have created called 'Rental'.

I know I need to add this income manually into the 'Rental' Business. I do this by adding an Income category of Rental Income. At this point, I am not sure what Account I should allocate to this. Should I set up an account with the same name as my personal bank account as that is where the originating payment was received?

Then I go back to the income transaction in my personal account and delete that value.

Now, I want to withdraw the income from the Rental Business and pay it back into my Personal so I can use the income for day to day expenses.

So back in the Rental business I now get stuck again as I don't know what account and category to choose for the withdrawl. I tried to use owner withdrawal but when I ran a cashflow report it did not debit the amount which should end up with a balance of zero.

Also when I add the income back into the Personal account again I am unsure of the category and account to use.

If anyone could help I would be very grateful.

Thankyou

NicoletteB

@ClarkeySJ Hey I moved your post to our Accounting forums so that our Wave Pros can jump in to provide some accounting advice!

I am not an accountant, so it's best to take what I say with a grain of salt, but from your description, it sounds like the move of the business expense from Personal or vice-versa isn't being accounted for properly. This article from our Help Centre goes into specifics but this piece of advice is where I think you are getting stuck: You can categorize a personal transaction to any account listed under Business Owner Contribution and Drawings, like Owner's Investment/Drawings. You can see what Business Owner Contribution accounts you have and add new accounts under Accounting > Chart of Accounts > Equity.
You would also use this step if you were looking to move the transactions back to Personal, by using the same equity account.

ktrow

@ClarkeySJ Did you get an answer yet since I want to make sure that my "Owner's Drawings" are removed from my balance sheet?
I also think that an amazing feature would be for Wave to allow accounts to be connected so that transactions can be categories as Business 1 (photography), Business 2 (rental), or Personal! This would make everything a lot easier and give Wave a massive competitive advantage over every other app for sole proprietors.

Barsin

Hey there @ktrow

As it stands this feature was removed from our previous system due to some errors in the accounting that was happening in the background. When we migrated over to the new system we knew we needed to spend a bit more time trying to develop this feature so just know that it's something our team is looking into.

Equity accounts do appear on a balance sheet as they should for a few reasons; your business be still incurring an expense (even though it wasn't a business expense) however this is still a relevant balance to report on if there is money coming in or out of an equity account incurred by your business. I hope this gives a bit more context.