Reimburse Owner for Startup Costs

@Tut - I understand your point and since @Brucanna might also ask, this was meant to be a passing reference to my inventory method last year. Since I was able to do an “Import bank statement” into my cash accounts (never having a need for invoices), my accounting was always up-to-date. I was just having issues with managing inventory (after a sale) in Manager, specifically with the practice of periodic vs. perpetual inventory.

Since I didn’t decide on using Manager until later in the year, I dreaded the thought of going into each of the hundreds of imported past sales to allocate the amount of inventory used for each. Although I am now able to maintain an accurate running inventory after each sales transaction, that wasn’t the case last year in which I only entered a monthly count.

The simplest thing for you to do would be to put that 172.88 as a credit Starting Balance against the Owners Drawings Account.

In fact if you wanted to be more accurate - re-instate the PayPal Starting Balance as 401.75 debit and then make the Owners Drawing Account Starting Balance 574.63 credit. Then you will fully reflect the contributions made to “Start” the business in Manager

(if you do the above, you will need to delete the “trick” Receive Money)

1 Like

Hi, I need some help in this field. I have withdrawn cash from my company and want to show it as reimbursing or similar for initial start up costs. In other words pay my self back for the money i invested starting up. What is the best way to do this? Thanks.

Do you have the equity side of the initial start up costs in the accounts, if yes, then the Spend Money would be a contra into that equity account.

In the equity section i have Capital Accounts, Retained earnings, Starting balance equity. I have been Spending money to capital accounts. Is that correct?

Yes, but you shouldn’t be having a Starting balance equity account showing under Equity, this indicates that your starting balances are out of balance. Review your Report - Starting Balances to see where the problem is or post a screenshot of that report here for assistance.

My starting equity is not showing under its $2700. Now my Capital accounts is Negative. Is this correct?

Sorry, without actually seeing what you are seeing - its not possible to comment further.

No its not correct to have negative Capital and its not correct to have that Starting Balance Equity account.
Have you reviewed the Report - Starting Balances. It would appear (at a guess) that you haven’t put in a Capital opening balance.

Also, if you are a sole proprietor, there is no real need to use the Capital Accounts tab which is more appropriate for partnership, but if that’s your preference - no problem. The alternative is just to create a direct COA Capital account (or Contributed Funds)

@Ashuraya, be sure you have read these two Guides:

What report? Why is this so hard to do? When you start a business, what is the money called that you start with? Is it Capital or Starting balance Equity. Can someone please explain it to me in basic english without using accounting terms which i may not know because im not an accountant. Seriously. Manager needs to make it easier for people to start. with out going back and fixing things over and over again. Im guessing now i have to start all over again is that correct?

its a company which pays me a weekly wage. but i have withdrawn some money from the ATM and want to say the company is paying me back for my investment or start up money. what ever you want to call it.

Go to the Reports tab and under the General Ledger section you will see the report

When you say this, do you mean a corporation with shareholder and director.
It is important that I understood this as it affects how the capital is set up which is different to a partnership or a sole proprietorship.

Regardless, in general terms - capital is correct. In Manager - Starting Balance Equity indicates that the starting balances (opening entries) are not in balance. At the base of that report the total should match

No you don’t have to re-start all over again, it just a matter of getting the initial entries correct.

yes im the sole shareholder/director. The company pays me a weekly wage. Pty Ltd.

OK, being a Pty Ltd means things have to be set up slightly different as to how you have it currently.

With a Pty Ltd, the capital value equals the value of the issued shares, all other contributed funds go to a shareholders loan account, so once we have this set up correctly your ATM withdraw will be a repayment of the shareholders loan - so to start

  1. go to Settings - Chart of accounts and set up these Balance Sheet accounts:
    a) Shareholders Loan - which will be Group - Liabilities
    b) Issued Shares - which will be Group - Equity

i) do you happen to know the number of shares issued, they were probably at $1 each
ii) what are the items that make up that capital value of $2,730.18

Once these items are known then we can construct the opening balances

Ok. I have set up Shareholders Loan account under liabilities and started it from the date i first started with manager and added the $2730.18 to it as debit.
I set up Issued shares under equity and started it the same date but did not input a figure yet.
Number of shares issued is 1 at $1.
Make up of Capital investment is $1750 cash in the business account and Company registration etc. see photo.

I can only reply 3 times as im a new user so will be editing this one from now on.

Please don’t try and jump the gun, it will only increase the amount of work that you will have to undo and redo.
Currently the figures don’t add up: 2730.18 less 1750.00 = 980.18
Those Journal figures 4.75 + 4.30 + 65.00 + 569.00 + 65.00 + 82.45 = 790.50 a difference of 189.68

  1. did the business exist prior to starting with Manager - yes / no
    a) if yes - then opening balances are required
    ----- i) do you have a balance sheet from your previous accounting system
    ----- ii) what is the Manager Start Date
    b) if no - then opening balances are “not” required
    ----- i) business records would just be the date of the transactions when recorded properly

  2. how was the business account of $1750 taken up - as a Receive Money - yes / no
    a) if yes - then the Account allocation would be Shareholders Loan
    b) if no - then how does this value get into the business account balance

  3. how were the company registration etc expenses paid

  4. the Issued Shares account should have a “credit” opening balance of $1.00
    a) how this is entered depends on your answer to Q1

  5. the Shareholders Loan account should have a “credit” balance, not “debit” as you have it.
    a) how this is entered depends on your answer to Q1 & Q2

If we process the transactions appropriately based on the correct sequence of their occurrence then everything will flow naturally and logically. Journals shouldn’t be required as you have currently used them. Below is a mock up of a “possible” starting balance outcome.

Note - no Starting Balance Equity account balance.

Answers to your questions.

  1. Manager is the first and only software i have used

  2. Yes receive money

  3. Personal bank account