How to record cash payments for Personal loans.

C_Whitaker

My business is small (property rentals) and while it’s been useful getting things sorted to see that income and expense, the main purpose of accounting this way now is 100% about tracking a Personal Loan to a family member, I’ve managed to get the past 4.5 years recorded properly so far, but this has only been for things that can actually be seen through the Bank Account or Credit Card Account where I pickup bills paid on family’s behalf or payments received and deposited to the bank.

Now I have to deal with two other aspects that are killing me!!

1. Cash I receive or Cash that is loaned (some of which will be categorized on Bank Deposits. But how do I use the money in transit account? I don’t know how to categorize those payments or payouts.

2. A small Cash app is also used at times to receive funds for this loan. Again, how to categorize it u til it hits the bank?

AlexL

Hey @C_Whitaker , this is somewhat of a tricky one as there are a few different variables in your question but I'll do my best to answer #1 and #2.
1. You can use transfers in Wave to create a transfer to a Money in Transit account and then out of it into your bank account when money is actually deposited.
2. It really depends how this Cash app works to determine where you'd put the account in your Chart of accounts, but you could create an account under Assets - Cash & Bank which represents your cash app. You can once again use transfers to transfer it in and out depending on when it hits your bank account..

Let me know if I missed anything 🙂

C_Whitaker

Thanks so much for the reply @AlexL Being brain dead is never conducive to accounting when you encounter something new!!! I’m having issues with Apple over some lost documentation and have come to a dead stop, but wanted to thank you for your response.

So the Cash App IS a debit/credit card/bank kind of thing, and I’m running it as such. Money in is treated as a Deposit to Cash and Credits the Personal Loan (Asset Acct). But, some of the funds will then be Transferred to Checking.....And there I drop the ball until later when I have more hands on or input from others. Again the Transfer still has to has to be?? Categorized? When my money flows the other way, I get it. Transfers to a Credit Card account are sent there to fund payments to the Credit Card Company and when the statement comes in, I simply Edit the description to read Payment.

Let me mention here that I’m working from 2017-Present and the Deposits to Checking were not very detailed, so I’m going to face that challenge as well and will probably have to do journal entries.

As for the Cash on hand - it’s working pretty much the same but on a bigger scale.

AlexL

Hi @C_Whitaker , I think I understand what's going on...

If the Cash App is essentially like a bank account, you'll want to treat is as such (an Asset account). If you're moving funds to checking from the cash app, you can create transfers to and from by categorizing the transactions as such (this article: https://support.waveapps.com/hc/en-us/articles/208621616).

Again, I feel like I may be missing one of your questions. If that's the case and because I know your situation now, feel free to explicitly let me know the issue you're having and I'll try to advise!