Need a little help for my first setup please


I have a few questions and would like to know if I am going in the right direction please.

1)The company has a sole owner(self employed), shall I set the director/shareholder loan as a “capital account”? And each time I input some cash in, do a transfer from the capital account to the main currency account?

2)In my old software I used to have these accounts:
Main Bank(where all the money is received from other accounts)
Paypal USD
Paypal GBP
Paypal EURO

I cannot find a way to set the Main Bank as a “Bank account”, I can only see “Cash account”, did I miss something?

3)When creating a Cash account there is a tick box about “this account is maintained by a financial institution” What does this do please?

4)Regarding the multi-currency, if I receive a payment in my Paypal USD but wish to transfer this amount to my “Main Bank” that is set to Euro, how will the gain/loss be added to please? Will this be calculated automatically upon clicking on “transfer”?

5)Regarding the multi-currency rates, I see I can set a rate, but how can I have all the rates set within the last 3 month automatically please as I cannot see myself inputting each daily rate every time…is there a clever trick for this please?

Thank you all!


Read this Guide first:

Bank accounts are cash accounts. Check the box:

This tells Manager it is not a petty cash fund or till. So you have the option to import statements and reconcile.[quote=“bambinou, post:1, topic:9037”]
how can I have all the rates set within the last 3 month automatically

There is no automatic exchange rate update. And you don’t need to update until you want accurate balance sheet figures.

You should create a test business and play with these things. The answers will become obvious:

Thank you Tut,

One thing I do not understand with the link provided here:

Is that it says “Sole Owner without share holder”, but this is a limited company where my wife in the sole owner and shareholder. Does this count for “Eligibility for simple equity accounting” setup?

Here it says “You must be the sole owner of the business, with no partners or shareholders involved.

Thank you.

actually from what I understand, this is only for self-employed without a limited company.

The answer to your question will depend on local law. The Guide is meant to refer to corporate shareholders. If your wife is the sole owner and satisfies the conditions described in the Guide, she qualifies from an accounting perspective. But laws on limited liability companies differ around the world. Your local law may require that your contributions go to an account designated as a capital account or director’s loan. Check with a local accountant.

Yes you are right, “Director loan account”, so for this I think I can perhaps use the capital account and rename it to Director loan

Ok worked it out, you have to create a capital account when 3 sub capital accounts(which are already there), then you go to “receive money” choose the bank account, and click on capitable account, here new dropdown menus show up with the capital sub accounts. tricky to find but good!

You’ve got it all correct. And it isn’t that tricky once you get to know Manager. Everything works the same way: Fixed Assets, Account Receivable, and so on: select the main account and the subaccounts show up. You just need to make sure the subaccounts are defined first.

No, if you are a corporation with issued shares which appears to be your case by your comment “my wife in the sole owner and shareholder” then the Directors Loan Account needs to be a BS Liability account.

For a corporation the only value under BS Equity Capital is the value of the issued shares - so if 10 shares are issued at 1.00 then the Capital Account called “Issued Shares” has a value of 10.00. All other funding movements go via the Loan Account.

The Capital Accounts tab in Manager is designed mainly for Partnerships not Corporations.

@bambinou, what @Brucanna wrote is also true. When I said your wife qualified from an accounting perspective, I was relying on your statement that she was the sole owner. While you also said she was the sole shareholder, I tried to make clear that the Guide was referring to corporate shareholders of issued shares. In some jurisdictions, a single owner, even if that ownership is through shares, or a single owner of a limited liability company, is treated exactly like a sole proprietor/trader. The meaning of identical terminology is a matter of law, not accounting principles.

Likewise, some jurisdiction dictate the structure of a chart of accounts and give specific names to equity accounts according to the type of organization. Other jurisdictions don’t.

Your response to my statement that local law may require contributions to go to an account designated as a capital account or director’s loan was, “Yes you are right, “Director loan account”.” You went on to say that you thought you could rename the capital account. I took this to mean you were talking not about a corporation with shareholders but some form of organization in which a single capital account (named as a director’s loan) was appropriate.

So that was my basis for saying you’d got things right. But if your local law requires the company to be treated the same as a corporation (whatever terminology might be used locally) with multiple shareholders, even though there is only one, then @Brucanna’s comments are more appropriate.

I would differ with @Brucanna only on one small point. The Capital Accounts tab is perfectly appropriate for sole proprietors/traders. Some users and their accountants would prefer it because of the interim visibility it provides on drawings. Others would find it unnecessarily complex for small businesses. That’s a matter of personal choice.

I would doubt that as they are distinctly separate legal entities all over the entire world.
With ownership of shares, the corporation owns the assets /profits and pays corporation tax & dividends.
With ownership of limited liability company, the individual owns the assets/profits and pays personal taxation.

If a corporation is in involved in a legal action the owners (shareholders) are not directly involved.
If a limited liability company is in involved in a legal action the owners are directly involved.

Historically a company is an incorporated organisation which has the status of limited liability. Whereas a sole proprietor or partnership is an unincorporated organisation which has unlimited liability. Unfortunately places like the USA have blurred this distinction by creating a status of LLC, where an unincorporated organisation can have the status of limited liability without becoming incorporated. See following definition:

A limited liability company (LLC) is the United States specific form of a private limited company. It is a business structure that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation.

In fact they would have been off with LLT or LLB - limited liability trader/business, so that the word company didn’t become polluted by the cross pollination.

However, being that as it is, both in legal and accounting terms the two are not treated exactly the same.

Thank you to both of you.
I have emailed an accountant to make sure it will be right before moving the accounts over because I am not in the united states but in Europe.And yes this is an LLC with a single shareholder/owner.

Just a quick question please, what would actually be the difference in terms of calculation between having a director loan in the journal as a liability account or having a capital account, what does this affects in the account please? This is the part I am not understanding(just for personal knowledge I would love to know the answer).

This statement doesn’t make sense - you can’t be both a LLC entity and a corporation (shareholder) entity.

A Limited Liability Company (LLC) is a “hybrid business entity” having certain characteristics of both a corporation and a partnership or sole proprietorship . The LLC business entity is a type of unincorporated association and "is not a corporation". The primary characteristic an LLC shares with a corporation is limited liability. The LLC is well-suited for businesses with a single owner - note owner not shareholder.

A Corporation is a business which has a separate legal entity from the owners (shareholders). The corporation is an incorporated association with limited liability, issues shares to owners and appoints Directors to manage the business entity.

The difference relates strictly to the type of business entity - incorporated or unincorporated

My understanding is that the EU doesn’t have LLC’s - USA style, so I am going to assume that your wife’s business is a corporation, therefore your only option is either a Shareholders Loan A/c or Directors Loan A/c.

ok I understand the wording now…

LLC is for USA LTD for Europe(as you said)

Both are some kind of limited liability companies but it does not work the same way, their liabilities are limited in a different way.

Now regarding “Corporation”, I have also noticed that in USA and Europe the wording is different:*

Corporation in Europe:
a large company or group of companies authorized to act as a single entity and recognized as such in law.

This is why I could not understand why you mentioned a corporation when my wife works from home, it seemed way too big for me, usually here corporation are huge.

To clarify, she has an Ltd which is limited by the amount of money she has invested into her shares.

So based on what you said, the corporation for you means LTD for me, therefore shareholder’s loan seems right.

But using this software, would you create a “capital” account and call it Shareholder’s loan where I simply transfer the money from that account to the Main bank account? I do not need to separate the debit and credit via different journals, do I?

My accountant has not yet replied to my email unfortunately…still awaiting.

Thanks again!

Not quite - for corporations, USA = Inc, UK = PLC, EU + Others = Ltd (some use Pty Ltd)
LLC is a hybrid form of a Sole Proprietor or Partnership but with limited liability added in.

I use corporation to indicate an incorporated organisation (Inc, PLC, Ltd) rather then size. I use to use “company” but the USA has polluted that term by also using it to refer to an unincorporated organisations - LLC.

With regards to the software the simplest thing would be to a) deactivate the Capital Accounts tab, b) create under BS Equity an account called “Issued Shares” where you would put “the amount of money she has invested into her shares” and c) create under BS Liabilities an account called “Shareholder’s Loan” where all other funding transactions (to and from) via the bank account would be entered.

Not sure what you mean by this - all funding transactions would be done via the Cash Accounts tab

Superb! Thank you so much!