using undeposited cash for owner drawings

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Peter_6481025
Peter_6481025 Member Posts: 14
edited January 2020 in Reckon Accounts (Desktop)
I have the owner taking cash from undeposited funds that I need to account for.

I am assuming that I would deposit the cash to petty cash (or similar account) - but I need to post the payment to the owner as "owner drawing"

How do I best perform this task to ensure I can properly account for the cash I have taken, and correctly show that money has been paid to the owner, as a owners drawing?

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  • narelle harvey_7311100
    narelle harvey_7311100 Member Posts: 8
    edited September 2015
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    KEEP A LIST OF DEBITS AND CREDITS AND YOU SHOULD BE FINE.
  • Charley
    Charley Member Posts: 544 ✭✭✭
    edited January 2020
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    Tell him not to do it
  • Peter_6481025
    Peter_6481025 Member Posts: 14
    edited January 2015
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    So I understand you correctly, this is performed in:

    BANKING > TRANSFER FUNDS 

    Transfer funds from: [Petty Cash]{Bank}
    Transfer funds to : [Owners Drawings] {Equity}

    Alternatively, the other way you have described would be to:
    BANKING > WRITE CHEQUE

    Pay to [Owner]
    From Account [Petty Cash]

    Am I on the right track here?
  • Peter_6481025
    Peter_6481025 Member Posts: 14
    edited January 2015
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    Unfortunately, that does not work. He does what he wants and I just have to fix up the books so everything balances.
  • Peter_6481025
    Peter_6481025 Member Posts: 14
    edited January 2015
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    Appreciate the comment, but I was looking for the procedure to record it all so I balance.
  • Charley
    Charley Member Posts: 544 ✭✭✭
    edited December 2016
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    Hi Kevin Peter, I think it's part of our job as bookkeepers to find systems that work for our clients so that it doesn't cost them so much. I've had a few clients like this but when you explain to them why you need to keep monies in and monies out separate most will see it and listen. Those that don't want to listen I have a separate rate (double) for sorting out the crap, when they see how much extra it can cost then they listen. I've got one client that refused to listen and I didn't know what monies related to what whether it was bill payments, drawings or whatever. In the end I talked to his wife and he's been very meek and listening ever since. His accountants bill was down heaps as well and I think that's why I got the bottle of Jamesons for Xmas.
  • [Deleted User]
    [Deleted User] Posts: 0
    edited January 2015
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    When you receipt the payments from customers you put to undeposited funds. When you do the banking - select the receipts you are going to bank and then on the next line put a minus to owners drawings and put an explanation that cash taken by owner , or something similar. this will give you the correct amount for banking , the right amount receipted to the customer and the correct amount to owners drawings. I worked for my father for a long time and this always worked. good luck.
  • Suzanne Lockwood
    Suzanne Lockwood Accredited Partner Posts: 71 Accredited Partner Accredited Partner
    edited September 2019
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    Hi Peter,

    In addition to Kathy's suggestion I get some of my clients to use the 'Cash back goes to' option at the foot of the Make Deposits screen.  Select the Drawings Account (or Directors/Beneficiaries Loan Account etc depending on the entity type).  Enter a relevant memo and the amount used for private use in the Cash Back Amount field which will be treated as a negative amount.  You would use this method if you wanted to see a subtotal of the moneys that would have been banked, before the adjusted total that was banked.  Either way works well.  If you have to account for additional funds banked that derive from the business owner use Kathy's method with the additional line with a positive amount to ie Capital Contributed account or offset it against Drawings for small/random amounts.  Hope that helps.

    Regards, Suzanne

  • Peter_6481025
    Peter_6481025 Member Posts: 14
    edited December 2017
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    Hi Suzanne,

    Thank you for your comment. The method you have outlined is most likely the easiest method, even when the owner takes specified amounts of cash.

    In regards to Kathy's suggestion, I sort of understand what she is referring too, please permit me to outline the method and correct me if I am wrong:

    To assign an amount of cash taken, I would:
    1. choose the owners name from received from field?
    2. Select undeposited funds from the "from account"
    3. Choose CASH as the payment method
    4. add the amount of cash taken as a minus figure?
    5. Add a comment in the comment field as to where/why cash taken

    Regards, Peter
  • Sally McIntosh, Accredited Consultant
    Sally McIntosh, Accredited Consultant Accredited Partner Posts: 468 Accredited Partner Accredited Partner
    edited February 2017
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    Hi Peter,

    Also, if you are using the Make Deposits/Record Deposits window to receive cash into your Petty Cash bank account, at the bottom of the screen is an option for cash back where you can select the drawings account and the amount.

    But I am a huge fan of transfer funds - very quick and easy!

    Kind regards,

    Sally McIntosh (sally@samsolutions.com.au)

  • Acctd4
    Acctd4 Accredited Partner Posts: 3,456 Reckon Accounts Hosted Expert Reckon Accounts Hosted Expert
    edited September 2019
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    I agree with Kevin, Charles, Suzanne & Sally.  However, personally I never use the "Transfer Funds" feature because:

    1. It doesn't allow the use of a Name
    2. It doesn't allow the use of a transaction number (some people like to use the specific bank's EFT transaction number, which "Transfer Funds" doesn't allow for) &
    3. It doesn't provide enough detail in reports (mainly due to 1. & 2.)!

    Instead, I always use the "Write Cheque" or "Make Deposit" options to enter transactions.

    The biggest tip I give my clients regarding bookkeeping is:

    You need to re-create what has actually occurred .....

    Put simply:

    If you receive money, use "Receive Payment", if you've purchased something that you have a tax invoice for, "Enter Bill" & when you pay it, "Pay Bill".  If you purchase something you just receive a till receipt for, "Write Cheque" etc

    When it comes to "Petty Cash", sometimes this is an actual cash tin so I always recommend entering each receipt (via "Write Cheque") using "Petty Cash" as the bank account.

    Some suggest entering all the Petty Cash transactions on one "Write Cheque", but personally I find that a very inefficient way of tracking & finding transactions down the track! 

    If the owner is specifically taking the monies from cash actually BEING deposited, I would use the "Cash back goes to" on the "Make Deposits" window, to correctly deposit the cash less the owners amount.

    For owner's draws/personal spending from either the bank account or existing cash held, I would enter a "Write Cheque" (to the Owner) & post it to either "Shareholders Loan" (other current asset-type account, if a Pty Ltd Co) or "Drawings" (Equity-type account, if a sole trader/trust/partnership)

    Shaz Hughes Dip(Fin) ACQ NSW, MICB

    *** Reckon Accredited Partner (AP) Bookkeeper - specialising EXCLUSIVELY in Reckon Accounts / Hosted ! ***

    * Regd BAS Agent (No: 92314 015)* ICB-Certified Bookkeeper* Snr Seasonal Tax Consultant since 2003 *

    Accounted 4 Bookkeeping Services

    Ballajura, WA

    shaz@accounted4.com.au

    https://accounted4.com.au

    (NB: Please give my post a Like or mark as Accepted Answer if I have been able to resolve your query as this helps others when seeking solutions!)
  • Graham Boast
    Graham Boast Accredited Partner Posts: 331 Accredited Partner Accredited Partner
    edited June 2015
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    Hi Peter. In step 2, the from account should be either drawings or beneficiary/loan account - use drawings (an equity account) if you are not sure. Graham

    Graham Boast | 0409 317366 | graham@reckonhelp.com.au

  • Peter_6481025
    Peter_6481025 Member Posts: 14
    edited January 2015
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    HI Graham. Many thanks for further clarifying the procedure. The assistance here has been phenomenal! 
  • Peter_6481025
    Peter_6481025 Member Posts: 14
    edited January 2015
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    Shaz, you are a gem! Really appreciate the thorough explanation outlining the pro's & cons on this matter and the detailed procedure.

    From what I have read on this thread, I have not only learnt how to allocate cash taken by the owner, but I have learnt that even if he takes some cash, other cash I can post to other accounts to draw from later. Furthermore, I have learnt more than one way to do exactly that. 

    I can't thank everyone enough for their contribution on this thread as it has helped me immensely - as it will others!
  • Charley
    Charley Member Posts: 544 ✭✭✭
    edited December 2016
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    He's not lazy, his hourly rate is huge. It's just that he is one of those that expects everybody to fix his mess up behind him.


  • Kevin V. Russell
    Kevin V. Russell Member Posts: 265
    edited November 2016
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    Pete I think the problem people have is they buy Reckon software in the expectation they either don't need to understand accounting principles or that it will teach them how to do all this. That isn't what any accounting software will do. It's not meant to. There's plenty of books around. The Quickbooks for dummies series are very good.