Good day, I hope you can assist…
We are a group of 5 people and we decided to start a business. We went to open a bank account and each member paid his portion (R250) as a initial payment. Payments made is non-refundable (One can call it a “Exco member” Fee).
The account will be used to make micro transactions (IE: Office supplies, entertainment, travel expenses, etc.).
I’d like to know how and where do I allocate the funds in Manager so that I can pull a report that will balance with the bank account and also show “When”, “Why” and “How much” each member contributed.
Thank you in advance
Good day, I hope you can assist…
This is the starting equity of your “company”.
Thanks for the replay.
Apologies, I’m new to Manager (and accounting as a whole) and need to know how to enter it into Manager to reflect correctly…
(1) I’ve created my “New Company” in Manager,
(2) I’ve created the bank account in Manager…
(3) I’m now stuck wondering where/how to enter these transactions …
(4) Oky so I went to Capital Accounts and created each Exco member
(5) I then went to "Receipts & Payments and created a “Receipt” from that member/s
(6) There is now funds reflecting in the bank account as well as the value received in the Capital accounts. Am I on the right track?
Also, If I spend the money in the bank on Office supplies or whatever, will my Capital account stay the same or change as per my spending?
You have done things correctly, assuming your business is operating as a partnership.
Your capital accounts will remain the same unless you post transactions against them, such as when members withdraw profits from the business. You will post payments for expenses to various expense accounts.
Since you are totally new to accounting, you will probably struggle with Manager. It is difficult to use any tool until you understand what it is supposed to do. Learn about double-entry accounting at one of the many web sites available. I suggest starting here: https://www.accountingcoach.com/.
Thank you very much for the reply.
We are and are not operating as a partnership. (If we have a Facebook page our status would be “Complicated”…)
We operate as follow:
I own my own business and together with another partner we run it.
My partner and I have teamed up with 3 other individuals (Not part of my company) and have started this “Exco group”.
The “Exco group” is aimed at creating effective business en-devours, liaising with investors and managing the funding from those investors for specific projects that my company will roll-out. The group is starting to cost the initiative and we want to find the best way to keep track of contributions and expenses. We want to use Manager as the tool to keep record of everything regarding the finance side. I am still pondering on how I am going to deal with the investors funding and repayments, dividends and profit payouts to the members and inter-company fund transfers once we get going, but I’ll cross those bridges when I get there.
Well, you need to sort out your legal structure before asking how to record transactions in Manager.
I meant sorting those things out in the Manager program and doing it correctly there.
That is exactly my point. You cannot sort out what to do in Manager until you sort out your legal structure so you can set up Manager appropriately.
Business and legal structures has been sorted, the MOU, article of association and other contracts has been signed. Unless I’m completely confused (big possibility there) I only need to worry about the financial aspect of things in Manager? I was under the impression that one could setup what was needed as and when required so I still had time to figure Manager out.
I.E. We haven’t received an investment YET, but once we do what will need to happen is the following:
(1) The Exco group receives the funding/investment
(2) It needs to be entered into Manager. (I need to find out where and how)
(3) The Exco group approves a project and provides the required funding to my company. (I need to find out how to do this in Manager)
(4) My company spends the funds and does what is needed to complete the project.
(5) My company pays the Exco group a percent of the income monthly over a period until the negotiated amount has been paid in full. (This will need to reflect in Manager)
(6) The amount that the Exco group receives is split between different accounts I.E. Exco salaries (continues income), Loan/Investment repayment and a running capital account. (I will also need to learn how to do this in Manager).
(7) Some reports will need to be pulled, but I am sure I can figure that out easy enough.
And that’s basically it.
Or am I missing what you are referring to? Do I need to set these things up in Manager before anything else?
Jumping to your bottom line, yes. You must set up the structure of your chart of accounts before you can begin entering transactions. See Build a chart of accounts | Manager. Just what that structure should be depends on the “article of association and other contracts.” You have been trickling out information, first conveying an impression of very initial inquiries, but now making clear that things are in fact quite advanced.
I suggest consultation with a qualified accountant (whose services you will no doubt need periodically as operations of this fairly sophisticated concept continue) to see how she or he wants you to organize recordkeeping. Whatever the recommendation, Manager can accommodate it. But so far, you have not asked any specific questions with sufficient background detail for anyone to help.
I recommend, after you consult the accountant, spending some time reading the Guides. When you have detailed questions on how to implement something for your specific situation, come back to the forum and provide the necessary background information.
Thank you for this. I did not know that Manager needs to be setup in so much more detail than doing things as and when required. Your advice and guides have helped me understand much better than I have earlier today and I can see that it’s way more than just the basics that I’m going to have to learn. I will definitely go through these guides as well as the site that you posted. You have been very helpful and I really appreciate it. Please enjoy the rest of your day/evening. Until we speak again. Kind regards