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Personal transactions or payments from personal monies

Personal transactions or payments from personal monies

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Personal transactions or payments from personal monies

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It is quite common that people will at times pay for a business expense from a personal cash or a personal credit card. They may also pay for a personal  item with the business card or bank account. With both these scenarios we recommend setting up a balance account(s) for ‘Loan Accounts’ (eg: Loan Pete Smith). You can create these in Accounts / Nominal.

This method can save a lot of time against entering you personal credit card etc accounts on where you would have to enter all the personal entries on to reconcile the account. Plus you would have to have a different system(s) to cover other payment methods (such as personal Cash)

 

Business transactions paid from personal money or account

Pay the transaction(s) using the Directors Loan account as the Payment Account.

When you wanted to get your money back from the business, you would create a journal from into the business bank account (or other account) to the Directors loan.

 

Personal transactions paid from a business bank account

Create a Journal from the business bank account to the Directors Loan account. Note if you wanted to pay the business back you would create a pay the money into the business bank account (or other account) and create a journal for the same amount from the Directors loan account to the Business bank account (or other account). With a sole trade or partnership you could alternatively enter the transaction under the ‘Drawings’ nominal.

 

Having a balance account for your personal credit card account

The above methods are recommended, however if you really want to reconcile all of a personal account (eg: Personal Credit Card) within Evopos it is possible, but you would have to do it as follows or the Balance sheet values will be out:

Ensure there is a balance account for the personal account and another balance account for personal adjustment account.

Any business transaction should be entered under the appropriate nominal and paid by the personal account.

Any personal transaction should be entered under a Nominal under Other Purchases (Non P&L). Note: do not enter any Tax

At the end of each period list out all the personal transactions under the above nominal and create a transaction for the total amount but as a negative figure, and set to the same Nominal under Other Purchases (Non P&L). Pay by the Personal adjustment account. This would ensure that the Other Purchases (Non P&L) account adds up to zero, and when we look at the Balance Sheet the personal adjustment account corrects the balance on the personal account. For example if the opening balance was 0 on the personal account, we had 300.00 of business transactions and 500.00 of personal transactions, the closing personal account would be 800.00 and the personal adjustment account would be -500, so together these would be: 300.00 (the balance of the business transactions)