I have a set up question. I have set up two bank accounts, an actual business bank account and a business credit card. I loan money from a 3rd personal bank account (which I’m not keeping track of in Manager] to my business. Do I call that a loan to my business? I pay my business card from my business bank account. Most of my expenses are on my business credit card. Those I have recorded as an expense on my business card and assigned to specific accounts. When I make a payment to the credit card how do I do that? Transfer?
Yes, as long as there is a defined amount, interest rate, and repayments to yourself from the business. Remember, though, the IRS is not going to let you deduct interest you pay to yourself as a business expense. (You’d have to report it as personal income anyway, so there would be no point.)
Another way to handle such things is simply as expense claims. You buy something that is a legitimate expense of the business, but pay with personal funds. That will end up either as an adjustment to your capital account or a liability that can be reimbursed or cleared with a journal entry, depending on your form of organization and structure of your chart of accounts. Much simpler. See the Guide: https://www.manager.io/guides/6898.
Yes. Even if you must make the credit card payment via check to another institution, it still counts as an inter account transfer in Manager. So don’t enter it as a normal payment; you are transferring funds from a bank account with a positive balance to a bank account (the credit card) with a negative balance.
Before I plummet ahead…
My business is a sole proprietor farming operation. I’m growing blueberries and I’m capitalizing the business with my personal money and some grant money. I don’t expect to make any income for 3 years because it takes that long for blueberries to bear. It’s approximately a $20,000 investment of which $7500 is the grant. I’m paying my expenses with one credit card which I have set up as an account. My “loans” or investments from me get transferred from my personal bank account to my business bank account and then get used to pay my credit card. Any thoughts on the easiest way to keep track of this that would have the best tax result? It’s not really a loan or an expense.
When I import the credit card transactions everything shows up in Manager (the payments and expenses), everything except grant income and eventually sales which are in the other bank account. Can I get away with creating an account name like “Investment from RM” or “Loan from RM”. It’s kind of confusing and cumbersome transferring the money deposited in the business bank account to the credit card bank account. You suggested that expense claims might be an easier way to keep track but I don’t think expense claims fit what I’m doing here.
No one on this forum should be offering you tax advice. Get that from an accountant. Whatever you spend will be well worth it for the trouble it avoids and benefits it offers that you knew nothing about.
An investment from you is not a loan. That’s a contribution of capital and should be posted to a capital or owner’s equity account, depending on how your accountant prefers you to set up your equity structure. So, when you put your own money into the business, post the receipt to equity.
This makes no sense. What do these have do with the imported credit card statement?
You can get away with creating any account you want. But what you’ve described is your own equity investment. So either set up a capital account or an owner’s equity account.
In closing, it strikes me, based on your questions, that what you need before delving into procedures to use in Manager is a better understanding of basic accounting. Start here: https://www.accountingcoach.com/.