Help me?
Im having a moment here
If I buy something using my own money for the business - I make a purchase and pay it from Propieters drawing account - correct?
Then what?
Do you go into banking and make a new transaction from the business account to the drawings account to get my money back?
Also the same if i pay cash for something - is this treated in the same way?
Sorry for the newbie questions…
When you’re self employed there’s no distinction between you and the business for accounting purposes. The drawings account tracks any movement of money between your personal funds and the business, if you pay for a business expense out of personal funds it is tagged as a payment from the drawings account, if you take money out of the business account for personal use (whether to pay yourself back for a business expense or simply because you need money to live on) then it is tagged as a transfer to drawings. None of this affects your taxable profit, which is simply sales minus expenses.
I do have 2 seperate bank accounts.
If i pay via my own cash - tag it as from drawings account.
Then stage 2 as it were (to log getting my money back) i transfer from business account to drawings account?
Every month i check the business balance on quickfile vs. actual bank balance but sometimes doesnt add up and wonder why so guess im doing something wrong somewherr
Do you actually transfer this money from your business to your personal account?
It’s not really necessary from a tax PoV as Ian says, you could skip this step.
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