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Xero/Reckon/MYOB bookkeeping – How to enter transfers/ payments from personal account to pay business expenses
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Published on Thursday, 05 April 2018 10:46
A regular client emailed - to check they had entered transaction correctly - To enter a Transfer of money to pay business expenses in this case, to cover a PAYG payment to the Australian Tax Office (ATO) – they emailed –
I am unsure about an entry I have made and wonder if you can tell me if I have done it correctly.
I had a PAYG for John and at the time there wasn’t quite enough funds in Bus. Acc. so I transferred money from personal a/c to cover.
For the entry I used.. Receive Money
Bank Acc: Bus Acc
Payer: C personal
Amount: $ -----
Method: Other – then put note in details.
Memo: Funds transfer from Pers. to Bus a/c
Then I credited
21410 - PAYG Tax - which is where the payment will come from.
Is this correct or should I have put to something else?
Kind regards
L
Answer –
Good effort – nearly right!
There are 2 transactions to do, just to be clear (and a third one to pay it back later) -
1. You lend money to Business Bank account –
- Receive Money
- Top account is Bus bank account, then date, $ etc
- Memo – eg “C&L loan to Bus bank”
- Lower account is YOUR Personal Loan account – either a number 2 Liability (Long Term), or Equity – but number 2 and set as a CREDIT CARD allows you to use in other transactions like a bank account at the top account
2. The Business PAYS the PAYG
- Spend Money
- Top account is Bus bank account, then date, $ etc
- Memo – eg “Pay ATO PAYG” – add name if specifically matches an employee amount
- Lower account is the 2-1410 PAYG Tax account
3. The Business pays you back – if this occurs later (or can just leave as is and business always owes you this later)
- Spend Money
- Top account is Bus bank account, then date, $ etc
- Memo – eg “Pay ATO PAYG” – add name if specifically matches an employee amount
- Lower account is the 2 Liability Personal Loan Account
If not clear, email or call for FREE!
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