Manual transactions vs splitting/moving transactions from personal to business

adventurous_skyadventurous_sky Member Posts: 1

Hi there!

I am new to Wave and still trying to learn the features and best ways to use.

I have a very simple single-member LLC s-corp consulting business. I have a business checking account where revenues and future business expenses come in. I also have a personal credit card and checking account where I have certain transactions that I would allocate a portion as business expenses (small business deduction for rent, utilities, cell phone) as well as a few startup expenses. I linked my personal accounts to wave but the movement of transactions to personal and splitting and allocating seems like more effort than just creating manual transactions for the 3-5 expenses per month I would categorize (versus dealing with all of my transactions). Are there any pros/cons of not linking my personal account and just creating manual transactions each month for the allocated amounts I will expense to the business (ex: $1000 personal rent and allocating 25% to business so just creating a $250 small business deduction expense)? Are there increased chances of being audited with this method and having to provide more information later on to prove the manual transactions?

Thank you!

Comments

  • AlexLAlexL Administrator Posts: 2,869 admin

    Hey @adventurous_sky , we tend to recommend the automatic method because our users usually find it easier. I'm also all for encouraging users to do what's easiest for them, as long as they are following basic accounting principles. Assuming that the transactions that you're manually creating in your account are categorized and accounted for properly (I'd recommend reaching out to an accountant or CPA to confirm), then the manual addition of these transactions won't have an influence on audits later on.

    edited April 2, 2021
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