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How do I account for my time when not yet generating income to draw?

lucassolerlucassoler Member Posts: 2

I've started a business, and I'm working part time. I spent 10 hours this week toward the business. 7 of those hours were directly toward making the Finished Goods, and the remaining 3 hours worked on improving the website. While I don't have the funds in the account to make a draw (pay myself), I think I should represent my time as a cost in Wave, so that I get an accurate COGS (the 7 hours) and operating expenses (3 hrs spend on the website). Wondering if I would increase retained earnings. Would love to get guidance on the transactions necessary for this. Tahnks

edited December 15, 2020 in Accounting Technical Support

Comments

  • lucassolerlucassoler Member Posts: 2

    I think I'm doing this right (see attached images).
    These are my transaction details:
    Account: Owner Investment
    Withdrawl
    Category: Labor expense
    After looking at my reports, I believe this is a proper way to account for it?

  • AlexLAlexL Member Posts: 2,869 ✭✭✭

    Hey @lucassoler , I'd highly recommend you reach out to an accountant to confirm whether or not this would be the best way to handle your specific situation.

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