New Business - Unsure where / how to allocate initial investment

TinymozTinymoz Member Posts: 2

New (to me) services business - paid cost of business, insurances, professional fees, some simple starting costs from personal funds but I don't know the best place / way to record these. At the moment I've created them as Bills but I'm sure that's not the best / right way to record it. I don't want / need to take that initial investment amount out just yet, happy to get the business established further before I start to take out

Comments

  • LagoFinancialLagoFinancial Member Posts: 9

    Hello, ultimately it depends on the business entity structure. More like than not, it will be recorded under an Equity account (Owners Investment, Partners Capital Accounts, Capital Stock & Additional Paid in Capital, etc).

  • TinymozTinymoz Member Posts: 2

    Thank you. If I were to record as Owner Investment would I just create a expenses transaction for it?

  • Ellie_Writes_ThingsEllie_Writes_Things Member Posts: 42 ✭✭

    Hey @Tinymoz. If you're just giving putting some cash in your business' bank account, you'd make an income transaction. Use your business' bank account as the payment account and owner's investment as the category.

    If you're paying for expenses using your own money directly, it's a bit more work. I think there's something on the help center about that.

  • LagoFinancialLagoFinancial Member Posts: 9

    Hello @Tinymoz , Owner's Investment account is an Equity Account, not an expense account nor an income account. When you are in the Chart of Accounts page, click on "Add an Account" and select the "Equity" tab.

  • AlexiaAlexia Administrator Posts: 3,314 admin

    Adding this quickly, @Tinymoz!

    If you're looking for a workflow for covering business expenses from your personal account, we have one detailed here!

    Thanks, @Ellie_Writes_Things and @LagoFinancial for pitching in!

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