Hello
I have £20 i want to introduce into the buisness.
If I deposit to my bank to transfer to my buisness account
So I just use the transfer option then do a money out for the expense?
Or do I put £20 and transfer from the drawings account?
Is it same when dealing with petty cash if I make purchase of £20 Put credit of £20 transfer from drawings account?
Thanks for any help in advance
If the £20 is in your personal bank account, then you can simply tag it as a transfer to your current account to show it going into the business. Obviously this should reflect your real bank statement too.
Any money you put personally into the business (assuming you’re a sole trader), can be tagged as a transfer to the current account from your drawings account. If you take money out, the transaction is the reverse of this.
Hope that helps
Hello thank you for that so if I take money out I just do the same. If I introduce capital from cash I would do it to the petty cash account ? If I didn’t deposit the cash to the current account.
I want to introduce the £20 to the buisness via petty cash or from current account to buisness
“Any money you put personally into the business (assuming you’re a sole trader), can be tagged as a transfer to the current account from your drawings account. If you take money out, the transaction is the reverse of this.”
I am confused by the above statement
Cheers
Did you take your £20 out of your petty cash account and put it into the business current account? If you didn’t then you wouldn’t tag a transfer from the petty cash.
When you draw money from the business current account you tag it to the proprietor drawings account as drawings (that’s money going into your pocket) - so to put £20 from your own pocket into the business current account you do the reverse and tag the £20 transfer from the drawings account to the current account.
Yes mate so
example I spent 20£ of cash I have in my pocket or from my bank card not buisness
If I withdraw 20£ from bank it shows a transaction so it be no transfer just mark as cogs if I spent on expenses.
If I want to put £20 just in buisness to sit I would transfer from drawings account to my bank if I was to deposit it to my bank.
Is this correct or am I missing something thanks for replie
Also my main question is if I put 20 of my own cash for purchase and put £20 into petty cash I transfer 20 from drawings to petty cash then it accounts for the 20 I spent when I was out and got expenses such as stationary?
I also withdraw money from my buisness PayPal by transferring the funds to my partner do I simply tag as drawings or set up an account and transfer then withdraw
I have been sending the payment over PayPal as a gift so no fee, I send her the money and she will use via PayPal or withdraw it to her current account. I then just tag the sum as drawings which I believe to be correct but not sure if I should transfer to an account named her on the books
There’s a lot questions so my apologies.
Thanks
Thanks for the information.
If you need to add more information once you’ve posted, there’s a little pencil icon at the bottom of your post for you to update it. Just helps keep things easier to follow for others looking for help.
With any drawings or capital, you use the drawings account.
So, if you pay for something from your own bank account or own pocket, you tag the payment from the drawings account. If you put money into the business, it should be tagged as money out from the drawings account into the relevant bank account.
E.g. if it was a bank transfer, tag it to yoir current account; if it was a cash withdrawal, you could tag it into petty cash.
With PayPal, it’s similar. If the transfer was to you (e.g. you taking money for personal use), then you tag it from PayPal to the drawings account.
Hope that helps clear it up for you! 
I think I understand if I withdraw cash, u said to tag it in the petty cash do u mean transfer to petty cash,
And I sent some money to my partner via PayPal which I tagged as drawings as the technically it’s going to me just inside my partners PayPal as withdrawal if that makes sense.
So many different and confusing terms I’m really thick when it comes to this so breaking it down further for me would really help.
Edit: when I say my partner I mean my girlfriends PayPal so it’s my own drawing really.
I transfer to hers and tag entry as drawings is it wrong
I think I understand I over think it too much I need an accountant course!
The most important thing is to record profit and expenses and thereafter drawings is just the virtual account where I can account for where money has gone.
If I am withdrawing to my partners paypal it’s still a person withdrawal from the buisness , as most of money I earn I just transfer straight to her PayPal and tag it to drawings account. Hope this is correct
Thanks again all
That’s correct :). So the transaction that shows money leaving an account (whether this is PayPal, current account or any other), you would tag it as a transfer to the drawings account.
It shouldn’t make a difference who owns the PayPal account. If it’s a personal withdrawal, then it’s drawings.
If it helps, we have a panel of accountants and bookkeepers which you can contact for help. They’re also more qualified than me (I’m neither). If you view your dashboard, you will see an option in the top right hand corner for help with your accounts.
Hope that helps!
I have a guy helping from here but he don’t want loads stupid questions i just find it so complex and don’t want to make mistakes but I guess he can fix them at the end anyway using trial balance etc
Thanks again
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