Hi There, I’m new to Manager and indeed to accounting practices. I have setup my bank account in Manager and have imported my transaction from my actual bank and am slowly going through and reconciling them. But what need to show is the transfer of money from my business bank account to my personal account that we use to pay household bills. I’m not sure how to show this transfer in Manager.
Read this topic, it should answer your question
You should realize that this transfer is either an owner’s draw, a withdrawal from a capital account, a loan (if it will ever be paid back), or a dividend. Which it is depends on your form of business organization and the structure of your chart of accounts. The household expenses themselves have nothing to do with the business and should not be entered. And your personal bank account should not exist in Manager, because it is not an asset of the business.
Transfers in Manager are only used for movement of funds between two different cash accounts of the business. So you would not use an actual
Transfer money operation. The money is leaving the business, so us a
Spend money transaction, allocating the payment to an account appropriate to your form of organization and chart of accounts.
Thanks Tut. I’m not familiar with a “Spend Money Transaction” what sort of Account would I need to setup to capture these transaction and how to you actually create such a transaction?
You activate the Cash Accounts tab under Customise and then create related accounts.
Read the Guides regarding Cash Accounts procedures.
If what you said is true, that you have imported transactions from your actual bank and are reconciling them, then you already have the Cash Accounts tab set up and an account created. The button is right there:
On this point, I have been transfering any wages or drawings to an account that I’ve created an account under Équity’and have called it “Drawings”.
To do this correctly and to ensure that I have it right, are you saying that I should re-do these transactions using “Spend Money” instead of “Transfer” ?
Drawings is typically an equity account, debited to offset credits to cash accounts when an owner receives money from the business. You can’t transfer money to it. You can only transfer money between cash accounts.
A transfer does not record removal of money from the business. So unless you are merely sequestering money for later withdrawal, Spend money and allocate to Drawings.