Move business purchases from Personal into your Business
rogiervdheide
Member Posts: 3
I have read all posts about Business vs Personal but I cannot find the answer to the following:
As the business is starting up, there are quite a few owner's investments that are done by means of purchasing assets for the business privately. I have paid many times now for business matters using my personal (private) bank account or credit card.
I can easily import these transactions into the "Personal" profile of Wave.
In Personal > Transactions, I can use the drop-down menu on the right-hand side and select "Paid for ". I could also choose "owner's investment", which is odd because Wave cannot know for which of my two businesses this purchase is.
When I choose "Paid for " however, I cannot locate the transaction in the respective Business profile. Moreover, a report generated in the Business profile through Reports > Balance Sheet > Details > and then filter Equity > Transfer Clearing where I would expect the transaction to be, only generates an error, after which, moreover, any other filter produces the same error (a red exclamation mark and the text "an error has occurred".)
How do I efficiently move business transactions from my private bank account and credit card into the business?
Comments
Hey @rogiervdheide , when categorize a transactions as Owner Investment/Drawings it doesn't actually move the transaction over to your other profile. What's going on is it basically takes it out from being recorded in your Profit & Loss so that you don't have the wrong figures. However, if you do want this transaction represented within the appropriate account, you would have to recreate it.
Friendly suggestion, in US you want to be careful about mixing personal and business funds in one bank account, especially income. Most banks will offer multiple checking accounts in one customer account. Unless the bank protests, you can use a personal account during startup of a business. Banks don't usually question an account unless you are accepting credit card deposits. By separating accounts, Wave can import one checking account to your personal side and the other to your business side. In case of an audit, swapping income and expenses out of one account could cause IRS problems. I am not a lawyer, but learned the hard way.
That is indeed a really good suggestion, Katie. In our case, the business purchases done privately only occur during the startup phase of the company. Thanks!
HELP, HELP, HELP.
So this is kind of where I'm at and find nothing on the subject. This is also the only thing holding me back from proper books as my books are very easy once this is all structured correctly.
I have 3 sets of personal funds I started the business with. 1 - 4857.99 was a lot of purchases I made using my personal bank card to build my service trailer with equip & parts, etc. but instead of entering all of the transactions on my personal linked account I just want to enter the lump some as I have a report of all of the transactions.
Once that was done, I had filed with the state for LLC, got a business account then deposited $2000 with 5 more transactions with a total of 2593.87. ( These however are a direct deposit to the business account and my purchase transactions are recorded in wave ).
3rd is I made several purchases on my personal CC with a total of 1775.48 and finally with that, there are 149.81 in interest charges now on the credit card.
Lets say I have nothing categorized yet on these "loans" ( I do, but its irrelevant ) i fell none of them are correct.
I want the total of the first 2 ( 7451.86) to be paid back to me personally, and the Discover to be paid back with the interest that's incurred.
How is all this set up?
They are all basically considered loans, as equity in general is not paid back until a partner sells back his equity. I'm the sole owner / operator so there's no split equity.
Once I know all the correct entry categorization, whats the processes and categorization when paying back ?
I know its not your problem, but I don't have the funds to pay a wave advisor for a month support, and I know this is easy for you guys working with the software and troubleshooting day in day out.
Hey @Anson578 !
Anytime you would like to record a personal transaction in a business account or vice versa, you will want to select the Owner Investment/Drawings category. In short, this category is used to keep track of the funds you pay into and take out of your business. For instance, if you paid a personal expense with your business funds, using the Owner Investment/Drawings category will indicate that you withdrew funds from your business. On the other hand, if you paid a business expense with personal funds, using the Owner Investment/Drawings category will indicate that you deposited/invested funds into your business. I broke this down in further detail in this Help Center article's comments section.
When it comes to the interest on your credit card, you can record this just like the rest of the expenses paid personally. If you end up getting paid back, you can also go through “Owner Investment/Drawings” and zero it out. I hope this helps!