capital account and withdrawals

I’m seeking guidance on how to use the Manager for a specific situation in my company. Here’s the scenario:

My company is divided into two sectors: gutters and metalworking. The gutter sector is under my ownership, so I’m solely responsible for the profits and expenses in that sector. However, in the second sector, metalworking, it’s shared among four parties: three partners and what we call the office. The partners receive profits, but these profits are only paid when we complete a job. The office is responsible for all expenses, including employees, fixed and variable costs, and they cover these expenses with the profits they receive.

Since we recently started this partnership, I’m maintaining a general account where all values from all sectors are recorded. When necessary, the main cash account covers the expenses and later charges the responsible sector. Additionally, there are times when the partners need to make weekly withdrawals, but they don’t have sufficient balances in their accounts for this. The money of the partners only enters when we complete a job, and at that moment, they reimburse the amount they withdrew in advance.

My current approach is as follows:

I create a payment (Withdrawal) from the main account to the partner’s capital account, using the subaccount “Withdrawal.” For example:
01/08 - Withdrew $100
08/08 - Withdrew $1000
The partner’s capital account has a balance of $1100, while the main account has a balance of -$1100. When I receive payment for a service on 01/09, in the amount of $500 for this partner, I issue a receipt for that amount, and the partner’s capital account has a balance of $1600. I would like a way for the balance to be $600.

My main question is how to record the withdrawals in the capital account so that they are registered as a negative balance, as if the partner were in debt. Then, when I receive payment for the service, I would like to offset part of the withdrawal they made.

I apologize for any errors in my English (English is not my native language), and for this complicated situation. However, as I’m not an accountant, I found the Manager program very useful for tracking expenses and income. I’m not interested in other features of the program, only this specific aspect of financial control. Thank you for any help or suggestions.

You have described a major accounting error. You do not have a company with two sectors. You have two completely separate businesses, with fundamentally different organization. One is a sole proprietorship (also called a sole trader business) and the other is a partnership. So the first thing you need to do is consult a qualified accountant on how to separate them.

That is also fundamentally flawed accounting. Retained earnings are transferred to capital accounts in a first transaction. Then, a payment can be made from the partnership’s bank account to a partner, posted to that partner’s capital account. Again, it is clear you need the guidance of an accountant. These are not questions for the Manager forum.

Manager is a tool. Like all tools, it can be misused. So, figure out what the tool is supposed to be doing for you. Then, if you cannot figure out how to operate the tool (use Manager) come back to the forum. Based on what you have told us so far, your questions cannot be answered.


Thank you for taking the time to answer my question and I apologize for the accounting error. I already found a way to solve my problem. Even using it the wrong way, it still helps me with what I need :upside_down_face:

I will advise you to quit the wrong way and learn the right method for your proper accounting