Forum Discussion

7 months ago

Owners Personal Expenses

Hi Can someone please tell me if an owner uses his business account for all personal payments. How do you allocate this? Accountant said it should all be consultancy fees. I just need to know what ...

Princess_R
7 months ago
Hi Diana7,

Thanks for your response.

It's great to hear that you've already had a discussion with the accountant about this matter! Distinguishing between business and personal expenses is crucial for accurate financial reporting, especially when it comes to filing your BAS.

Understanding what falls under business and personal categories is a big step, and now it's all about implementing the right setup in MYOB to reflect that distinction. I'll share some related inquiries from the Community Forum posts that I've checked, which should offer you some helpful guidance:
How to record owners’ personal expenses
Recording personal transactions as owner drawings are setup.
Additionally, you may also find this Help article, Expenses for Business and Private Use, which may provide guidance. However, it is always recommended to speak with your accountant.

Feel free to create a new post again if you need further assistance.

If my response has answered your inquiry, please click "Accept as Solution" to help other users find this information.

Cheers,
Princess

Earl_HD

MYOB Moderator

7 months ago

Hi Diana7,

Thanks for your post, and welcome to the Community Forum! In this type of scenario, we recommend reaching out to an accountant for an accurate solution. However, for a general idea, you can set up a bank account (1-XXXX) called Owners Funds/Personal Funds and pay those expenses to that account. Then, at the end of the month or quarter, you can do a journal entry to transfer the balance of that account to the equity account. For any purchases or withdrawals from the business account, simply code them to your equity account.

Feel free to post again, we're happy to help!

If my response has answered your enquiry please click "Accept as Solution" to assist other users find this information.

Regards,
Earl

Diana7
7 months ago
Thank you much appreciated.
- Diana7
  7 months ago
  Actually one other question. The previous person doing the accounts, was adding GST to drawings which the accountant said was a way of paying personal tax. If I was to set up as per your suggestion would this still work? Thank you
  - Genreve_S
    MYOB Moderator
    7 months ago
    Hi Diana7,
    
    Thanks for the response.
    
    Based on the information available, adding GST to drawings is not a standard practice. Drawings are generally considered owner's withdrawals and are not typically subject to GST. However, tax laws can vary and it's always best to consult with a professional accountant or tax advisor for personalized advice.
    
    As for your proposed method of setting up a bank account for Owner's Funds/Personal Funds and paying expenses to that account, it seems like a plausible way to manage personal expenses. However, it's important to note that this method should be used in compliance with the appropriate tax laws and accounting standards.
    
    I strongly recommend consulting with a professional accountant or tax advisor to ensure that these practices align with the current tax laws and regulations.
    
    Please let me know if you need further assistance.
    
    Thanks,
    
    Genreve