Partners investment

Hi my partner and I invested money into the business. Every month, we repay ourselves an amount based on how much profit we make. How do I capture this on the package as I need to monitor how much we pay back pm, the total invested and once it’s fully paid. I created loan accounts under liabilities but it’s looking all wrong.

You should be using capital accounts. Read the Guide: Also read

Hi there thank you so much. Can you please clarify for me in the following situation : My partner and I invested R 100 000 each to purchase the business so we paid it to the person we bought the business from. We now draw R 10 000 each to repay ourselves for the investment amount. Would I capture R 10 000 each month under drawings until we reach the R 100 000 each?

Recording your initial contribution of capital depends on how it was actually transacted. If you and your partner paid the former owner directly with personal funds, you should record expense claims. See You would post the amounts to your capital accounts and the Funds contributed subaccounts.

If you contributed your funds to a company bank account and then purchased the business from that, you would record your contributions with receipts, posted the same way.

Each month, you will record your drawings on a payment form, posted to your capital accounts and the Drawings subaccounts. The question of how much you draw is not one for Manager. That depends on your personal choices. You can leave the capital in the business or take it out. Assuming the business is profitable, you will also probably transfer capital from Retained earnings to your capital accounts and your Share of profits subaccounts periodically. So hopefully, you will not stop at R 100 000. (Or perhaps your plan is to recover your initial investment and let additional capital from profits build up within the business.) Again, that is a business choice, not an accounting issue.

Perfect thanks