Hi,
Before I started trading I needed to buy materials & to do this I transfered monies from my personal account to my business account, how should I input this money in Manager & how can I pay it back without being hit with taxes?
I haven’t done a bank recon yet
Thanks
Colin
You should create a receipt in your business bank account. Allocate the money to an equity account. Which equity account will depend on the structure of your chart of accounts. If you are a sole proprietor, you might follow the approach outlined here and rename the Retained earnings account: Simplify equity accounting for sole traders / proprietors | Manager. Or you could create a capital account. See Set up and use capital accounts | Manager. If your business is a corporate entity, things are more complex, but this is still a contribution of capital.
However you structure equity, your recovery of money invested in the business is never income. It is a return of capital. So just enter a payment form, posting the payment to whatever equity account you posted the receipt. Apply no tax codes on either end of the process.
No it is not. Contribution of capital to a corporate would result in the issuing of shares.
If it is a corporate, you input the money to a liability loan account, then you are just paying back the loan.
That is why I said it was more complex. Based on the original description of the situation, it seemed fairly obvious a corporate entity was not involved, so there did not seem to be a necessity of explaining the complexities.
Perhaps so, but that doesn’t justify having “factually” incorrect statements which can mislead future readers of the topic.
Your very clear and precise statement “If your business is a corporate entity . . . .this is still a contribution of capital.” is factually incorrect and future readers should be made aware of that.
I’m a sole Trader
Then you should just post the receipt to Owner’s equity or your capital account (if you use one) as a contribution.