Hi all, this is the first time I have posted here so please bear with me. I run a vegetable growing business with my partner, and as we are now in profit, need to record any money paid to ourselves. This is essentially our salaries. I have done this as Partner drawings, but the money paid to us shows up as an asset which seems wrong. How should I be doing this?
Is your business effectively run the same as a Sole Trader (i.e. no separation of you and the business)?
If this is the case, I’m not familiar with partnerships, but I’ll share what I know about Sole Traders (which is what I am).
When you pay yourself, you put your “Partner Drawings Account” in credit. QuickFile sees this as a bank account which is effectively making it an asset. What you need to do, is journal it to a different nominal account such as 3100 “Proprietor or Partner Drawings”.
Generally, I do this at year end in one lump - it still has the same effect on the balance sheet, and the tax man seems happy.
Dislaimer: I’m neither an accountant, nor in a partnership
Yes, our partnership is for all intents and purposes exactly the same as a sole trader setup. Which means your solution should work perfectly, if it keeps the taxman happy, I’m happy.
Many thanks for the quick reply, much appreciated.
When I say it keeps him happy, I mean he’s yet to complain (which is good enough for me)
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