I’m going really mad after import bank statement…anyway, I’m trying to edit all the 800 “uncategorized receipts and payments”, but if I do my shopping at supermarket or someone give me back $100 that I loaned for example, how I can call it on the account? there are not “personal” voices on the dropdown menu.
Have a look at http://www.manager.io/guides/capital-accounts/
You can create yourself as a capital account, then categorize all personal expenses from business bank account under:
Capital accounts ->
Andrea ... ->
If you introduce your money into business, then categorize it under
Capital accounts ->
Andrea ... ->
Keep in mind, this is just one way of many to handle this. It really depends on what’s your business structure…
“Capital accounts -> Andrea … -> Drawings”
can I just do “capital account -> Andrea…”
or I need/must to “sub account” it with “Drawings”???
If you are using capital accounts, you must categorize all the way including sub-account.
If you are a soletrader, you don’t have to use capital accounts. You can rename your
Retained earnings account in your
Chart of accounts and call it
Owners equity. Then categorize all your drawings and funds contributions into this account.
Both methods are correct from accounting point of view. It depends on your business structure (soletrader, company, trust, partnership, fund… etc) which one is the most suitable.
Well…we have a little business on line and we sell stuff at markets too, now I’m going to add the sub-account but…what mean “drawings” is not enough put only “capital account” “personal expenses”???
sorry I’m a bit confused.
I think I’m wrong using “Capital Account”…I have 800 “uncategorized” receipts and payments in my bank statement.
Are not all about business because we use the account also for personal expenses like shopping, give money to my son, dentist, health stuff, ect…also we do a lot of shipping for business so sachets, boxes, postage; then traveling expenses like flights, accommodation, shipping ect…when I edit and click on the drop down menu there are not many category that I can use.
Probably I’m doing everything wrong…can you please explain how I can do that?
I’m sorry to be a pain
omg…maybe I gotcha…instead of using capital account i can always create a new account in Chart of account “equity”, so I can put different category for my income ed expenses…is that correct???
can you please confirm me that??
sorry for bother you
@andrea, I believe part of your difficulty understanding what to do with Manager comes from mixing personal and business accounting in the same set of accounts. All accountants would strongly recommend against that. Keep your business records separately and limit personal transactions to well-defined contributions of capital and withdrawals of capital.
Manager has a convenient tab,
Expense Claims, for when you or an employee spends personal money on company expenses. But paying personal expenses out of company accounts will usually get you in trouble with tax authorities.
For easy-to-understand background on double-entry accounting, I recommend http://www.accountingcoach.com.
I’m a bit confused because usually I’m doing all on excel and than my accounted do the rest, but I really would love to use Manager and learn how to do my taxes in the right and easy way…
From July we’ll start to use a separate bank account and will be easier but now I can change what we done so I try to find the best way to do it.
Thanks for your time, I’ll try to learn how to use Manager as I can
@Andrea, OK. so let’s do it properly. What’s your business structure? Are you a soletrader?
I and my partner have a little clothing business, mostly we do markets and festivals around Australia but from august 2014 we opened a website that has increased our income so now we need to pay the GST very soon, for that reason I start looking for a proper accounting software to replace my old school spreadsheet (and this one seems the best to me).
We work from home and we drive our van everywhere so our expenses are also internet, electricity, petrol, tools and blah blah…than we travel a lot around Asia, usually 3 months per year to buy stock and do researches, so travel expenses like flight, food, accommodation and shipping.
What I’m doing on Manager right now is adding on the drop down menu all the category that I need, seems working pretty well to me (hope it’s right), my only concern is about the personal expenses that appear on my bank statement.
At the moment they are in “capital account” “personal expenses” “drawing”.
I don’t think is the right way because I’m afraid about the “reconcile” but when I tried the profit and loss stet. seemed to work fine.
I really enjoy Manager but I really need to understand more about it and of course accounting.
Thanks for your help
@Andrea, your business sounds very interesting!
One thing you need to sort out is your personal expenses. These are not draws. Draws (or drawings, depending on your preference) are when owners take money out of the business. If I understand you correctly, your flight, food, and travel expenses are money you are putting into the company, by paying for these things yourself when they are actually for company purposes.
Expense Claims is perfect for this kind of transaction. You can use a journal entry to clear these to your capital account, or you could actually reimburse yourself by spending money from a bank account, if you have it.
But if you have purely personal expenses (like the dentist, health care, and other things you mentioned), and have already paid them from the company account, then you have no choice but to categorize them as draws. But this is very messy. You will easily be confused and find it very common to make mistakes. The tax authority will not like this one bit. In fact, they may take such actions as a sign that you are trying to pretend a hobby is a business. You risk being accused of fraud. Once again, I urge you to immediately separate the business account from your personal account(s). Don’t wait until July, because you’ll just have more problems piling up between now and then.
Also, because you have said you have a partner, you definitely need capital accounts, one for each of you. If you have both been spending personal money on company expenses, this just complicates things more. I recommend you quickly read as much of the materials at accountingcoach.com as you can and go back and recreate proper accounts of these transactions. If you’ve already entered them into Manager, you will be ahead on that process, but you may need to reallocate to proper accounts. The sooner you untangle the mess, the happier you will be. Good luck! And if you have specific questions, there are lots of people on the forum who can help.
u can make a loan account as one account. or you can make different loa accounts as per your loans.
Hi, thanks for your reply…totally agree with your consideration we’ll doing the personal account next week, and we decide to do the taxes “old style” (excel), this year and than start from July with Manager, so right now I’m just playing with it so I’ll be ready for next business year…
Thanks again for your support I’ll be asking you more things in the next month