Best Way to Set Up a Proprietor’s Account (2025)

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1

Hi all,

I’m a sole trader and I want to make sure I’ve set up my Proprietor’s Account correctly in QuickFile.

I found a thread from 2014 explaining how to set this up, but I don’t think it applies anymore — I don’t see a Proprietor’s Account automatically there by default.

I followed advice from a more recent thread which said to open an Equity Account for Proprietor’s Drawings, which I’ve done. QuickFile assigned it nominal code 1255 automatically.

I can use it to log payments (for example, I paid my mileage purchase invoice from it), but I’d like to check if this is still the best practice in 2025.

My questions are:

  • Is opening an Equity Account (nominal 1255) the correct way to manage Proprietor’s Drawings today?

  • Should this be linked to 3100 – Proprietor’s Drawings in some way, or is that no longer necessary?

  • Should I journal the balance from 1255 to 3100 at year-end, or leave it where it is?

Thanks! I just want to keep my accounts clean and follow current QuickFile recommendations.

2

I’m not aware of anything having changed. An equity account is right to track drawings and purchases with personal funds during the year, then at year end I would move any residual debit balance to 3100.

If I was making a substantial cash injection into the business I would generally tag that to a 3xxx “capital introduced” nominal rather than letting my drawings “bank” account end up significantly overdrawn but that’s just my preference, I like to see capital introduced and drawings taken as separate lines on my balance sheet rather than end up with “negative drawings” by the year end.

3

Thank you, Ian. For now I’m going to use it for the Allowed expenses (car and home office). I’m also leaving it with a negative balance because, from what I understand it doesn’t really matter. Unless next time I send money to my family account I can send the exact same amount as the total of Allowed Expenses for the last tax year and I tag it as a Transfer between accounts (to the proprietor’s drawings account I created as an equity account) instead of simply tagging it as a proprietor’s drawing. Would that work to bring it back to zero?