Issue Dealing with One Debtor, Two Businesses & Personal Expenses

NotAnAccountantNotAnAccountant Member Posts: 2

I'm very new to Wave. I have a debtor whereby I use their charge card most months for business expenses for my two businesses, and for personal expenses. The debtor invoices me and sends a monthly statement and the payments fall due 20th of the month following.

When I charge my account I might go into a store, purchase multiple items on the same day. When I get my invoice there will be a combination of items on the invoice - they can be for my main business, my sub-business and for personal use. Probably not the best way to do things I guess.

I uploaded all my transactions for my main business. Included in the transactions are payments to the debtor.

Please, how do I allocate the payments made to this debtor:
1. I need to allocate the transactions for my main business
2. I need to allocate the expenses for my sub-business
3. I need to allocate my personal expenses

Do I do journal entries, and if so - how do I go about doing this in basic steps please?

I have read through some of the threads, but as I'm a complete and utter novice, I need everything extremely step by step and I found myself getting lost and confused.

The debtor doesn't have anything I can upload to Wave, it would need to be entered manually.

If anyone has any hints it would be greatly appreciated. Apologies for the basic knowledge I have. Me and numbers just don't go together. I'm struggling and I'm very late with getting my tax documents to my accountant.

edited October 7, 2019 in Accounting Technical Support

Comments

  • EmmaPEmmaP Administrator Posts: 270 admin

    Hey @NotAnAccountant! Firstly, welcome to Wave! Accounting can be a tough world to step into, so kudos to you for jumping in! When you run your personal and business expenses under one bank account it can be a bit confusing. Generally, any transaction that is for another business or that is classified as 'personal' should flow through an equity account. If you are using a personal bank account to pay for all business expenses and you upload statements, then you can create Journal Transactions to show this in Wave. To create a Journal Transaction head to: Accounting > Transactions > click 'More' > Add Journal Transaction. This Wave guide should walk you through the steps of creating the Journal Transactions and the accounts to use: Handling business expenses with a personal account.

    In your case, as there is no statement to upload into Wave, you could create another business for your sub-business in Wave. Then manually enter the transactions for 'Personal' in the personal tab and transactions for your sub-business into the sub-business profile. You can then categorize these transactions accordingly.

    As this is getting a bit more complex, I'd also recommend reaching out to an accountant for best practices here, just to be sure you are on the right track! :)

  • NotAnAccountantNotAnAccountant Member Posts: 2

    Thank you so very much for your help. I really do appreciate it. I'm still eyeball deep in paperwork and doing my documentation (late) for my accountant.
    This will all seem a bit confusing:
    What I have decided to do is for the main business, delete all personal transactions out. Any transactions which are split personal and business I have edited the amount to reflect the business amount only, and then handwritten on my bank statements next to the figure what amount relates to business.
    For the sub-business, I'm going to copy my bank statement .csv files, delete any entries which don't relate to that business, and then upload them to Wave and do the same as I have done for the main business.
    It's probably not the best way to do it, but I've found this a real learning curve. Just had to cope with it the best I could. I will read over your comments again and will try and get my head around it. Hope I can do it all correctly for next year when I have more time to spend working out the right way.
    Thank you once again for your help. :)

Sign In or Register to comment.