Owner's Assets

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Peter Leech
Peter Leech Member Posts: 3 ✭
edited April 2020 in Accounts Hosted
Hey Guys, I'm hoping someone can help me out here.  So - we're a new business and we've selected the Reckon Accounts Hosted as our platform.  We commenced trading 1st of July.

The two Director's are great at what they do, but they're not so good at keeping track of all their paperwork - that's where I come in.

I've been given a fistful of receipts for all sorts of different bits and pieces - basically all the equipment that they've had to purchase in order to get going.  Now, if they had have just deposited a lump of money into the account and then spent it - I'd enter their investment as Owner's Equity - very simple - very straightforward.

But how do I enter purchases, starting inventory and equipment etc as representative of the costs the owner's incurred in setting up the business?

Do I pull out the trusty calculator and number crunch it all out and set it as opening balances?

Or do I set the two Director's (who have 50/50 shareholding) up as Suppliers and then list every line item and literally purchase it off the Director's and just pay them the physical cash (or do fancy footwork and send the payment over to the owner's equity barrel)?

Do do I set up the Director's individually as their own sub-cost centres of the equity barrel.

In other accounting packages it's simply a matter of assigning the relevant cost code... but I don't know how to do this with the Accounts Hosted System.

Then - how do I handle the GST component?

So - whats the best way forward here?  Any help would be greatly appreciated.

Regards,

Peter

Comments

  • Shannon Sciuto
    Shannon Sciuto Member Posts: 98 ✭
    edited February 2018
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    Hi Peter, there's a few different ways of doing it but I'd set up a couple of bank accounts: director 1 cash contributions and director 2 Cash contributions. And enter the purchases as cheques or Bill payments by those "bank" accounts. Once you've got it all entered or at the EOFY transfer the balance to their respective directors drawings/equity contributions accounts . Hope this helps!!
  • Kwikbooks (Professional Partner)
    Kwikbooks (Professional Partner) Member Posts: 824 ✭✭✭
    edited April 2020
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    Hi Peter

    I set up the same as Shannon suggested for all my clients either bank or credit card depending on which way who owes who falls.

    Not only can this be used for you problem, but it can be used all year as the directors keep dipping into their pockets for purchases or expenses for the business, also I don't always jnl it off to equity unless they have also put in starting capitol to the business, then I do to to keep it all together.

    If they have no starting equity I leave it as a bank account and if they take money from the business it also gets paid to their bank accounts, in effect acting like a drawings account.

    If they get reimbursed regularly,  monthly or weekly etc for their purchases this account shows how much  is owed to them to pay them and the bank account can also be reconciled  bank to nil each month.


  • Kathy Mackinlay_6947388
    Kathy Mackinlay_6947388 Member Posts: 141 ✭
    edited July 2015
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    Hi Peter, I do the entries by Journal and put to owners equity and make sure I use the GST code to be able to claim.
  • Peter Leech
    Peter Leech Member Posts: 3 ✭
    edited October 2015
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    Wow - I can't believe it's the 30th of July already.... it feels like I asked this question months ago!!  Anyway - thankyou for all your help.... over the course of this month I've been a) doing HUGE amount of data entry and b) implementing the advice and the balance sheet is coming up all nice and pretty.... big thanks for the help on this one :)

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