Paying Individual Account

Hi Guys,
I’m very new to this software and I have few question to be answered.

  1. I purchased an on going business from someone and he was very not organised. I’m currently following the below in order for me to setup the system in right way.
  • Whatever stock he has, I updated all under the starting balance under inventory in hand; as no purchase invoices were available and the cost I just estimated.

  • I paid him an amount of $100000. How do I update this in the system.
    In fact I paid him $70000 now and the rest at 30.May.
    how can I update this transaction. how can I create an account for him so i can track it later and the same time I can trace the due payment later.

Please correct me for the the first point if I’m wrong.

and guide me for the second point.


It is not appropriate to estimate what the former owner’s costs were. Your starting balances must be some fraction of the purchase cost you paid for the business. For example, suppose he $200,000 worth of purchased inventory. But you have bought the entire business for $100,000. You cannot possibly have a starting balance in Inventory on hand greater than $100,000. In fact, your investment in inventory is probably somewhat less, because you have probably also purchased customer lists, intangible assets such as rights to use a trademarked name, goodwill, and so forth. You should consult with a local accountant and possibly an attorney to determine how to value the inventory under your local laws.

How you record the transaction will depend on your legal form of organization. But it will involve some form of equity account to record the investment, a liability account to record what is still owed to the former owner. How the transaction itself is recorded will depend on whether funds were first placed in a business account before purchasing the business or you used your own funds. Again, your accountant is best positioned to answer these questions. Whatever the answers are, Manager can handle recording the purchase of the business, the liability, the bank accounts, contributions of capital, expense claims, or whatever. But so far, your questions are too broad. Figure out what you are trying to do first, then ask questions about how to use Manager to do it.