Owner salaries vs expenses!

Jesper666Jesper666 Member Posts: 36

I run my own business. So my question is how do i record my own salary or income in Wave in the best way?

  1. Before i started using Wave i always did a monthly end. If i did earn money during the month i recorded this as my salary. If the company for some reason did not make any money, minus in the account. I added the money back to make the account zero. The company owed me money. Money that i would take out again at a later stage when we had profit again.

  2. Now in Wave i have done yearly ends instead, journal transactions. Since i do not find this function here in wave. But i also see a few problems with this issue, let me explain one time.

a. Lets say i earn 1 miljon in the month of July! I have 300K in expenses during the month. So my net profit would be 700K. If i take this profit out in the end of the month, where should i record it? As a salary or something else?

b. Same as above, i earn 1 miljon in the month of July! I have 300K in expenses during the month. So my net profit would be 700K. If i take out 200K first week of the month, 300K the last week of the month! Where do i record these two transactions? Under salaries or something else? The remaining 200K would need to be recorded as well somewhere?

  1. What i am getting at is that i first take money out each month i record as a salary, an expense. That would drag down my profit margin. Then i take the rest out in the end of the month. Depending on where i record this i will drag my profit margin down again.

  2. Owner's Equity! Is this where i should put all the money i take out of the company? Even if it is in the middle of the month, or if it is in the end of the month?

If somebody out there have a nice solution to this problem. Please help me out one time! I would gladly take any information regarding this issue. This so my own accounting would be reflected correctly and made easier in the future.

Comments

  • AlexiaAlexia Administrator Posts: 3,314 admin

    Hi, @Jesper666!

    Number 4 is your answer! Paying yourself is just a matter of creating a transaction from your bank account to "Owner's Investments/Drawings". That's really all you have to do.

  • Jesper666Jesper666 Member Posts: 36

    @Alexia said:
    Hi, @Jesper666!

    Number 4 is your answer! Paying yourself is just a matter of creating a transaction from your bank account to "Owner's Investments/Drawings". That's really all you have to do.

    OK!
    So really i could do this from the bank account or even cash?

    Problem here for us with Wave is that we cannot connect our bank accounts. I have HSBC Philippines but they are not on the list for banks in Wave. Is there any other way i could do this, Bank statements i know but having the bank connected would be great.

    And we cannot use Payroll. This would also be great for us instead of doing what we are doing now. everything have to be entered manually all the time. It works but would be great if all these things would work for us also.

    Thank you again for all your help!!!

  • AlexiaAlexia Administrator Posts: 3,314 admin

    Exactly, @Jesper666.

    You'll have to figure out tax implications yourself, however. I'm not an accountant and the second taxes are involved, your best off having a chat with a specialist on the matter. We don't have immediate plans to expand Payroll beyond Canada and the United States. We'd love to bring Payroll by Wave to other countries, but we still haven't perfected Payroll in these two countries. Until we do, we won't be looking to offer Payroll elsewhere.

    If your bank doesn't connect to Wave, you can make a request from the Bank Connections page. Just search for your bank, click on "Can't find your bank?" and fill in the form. It'll send a request to the third-party data provider we use for our bank connection system.

    Always happy to help :)

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