Business vs Personal Budget transactions
Can someone please help me, I know it's probably ridiculously easy but for the life of me, can't work it out and always puts my budget out.
Business pays a wage weekly to our personal account (i.e. mortgage repayment or living expenses). What or how should I show this transaction, so it doesn't show that I have money there to be spent (providing a false economy).
I would prefer separate budgets as I had combined budgets prior but the budget page was scrolling and had way too many categories. The only thing that is bugging me is the tracking of personal transfers into our accounts. Would really appreciate showing what I am doing wrong. I basically want to see the money go out of the business completely and then an income/deposit coming into our personal accounts.
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Is your business part of your personal budget? If so, do you have a dedicated business account?
I don't know why you wouldn't consider this like any income -- you know, money "coming in" to your budget. It's not false economy. If you switched jobs, wouldn't you still have those (or similar) expenses? When you're looking through records, don't you want to know how much money you're actually pulling in to cover expenses? That's what you'll need from your next employer to not have to change your lifestyle. If you cancel part of your income & expenses, both are understated relative to reality.
To answer your question, though, you would categorize both the expense and inflow to the same category. Definitely not what I'd recommend, though.
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Thanks for your reply. I probably didn't explain, the company has numerous suppliers/customers etc that we also budget for (hence the separate budget), with numerous categories/sub-categories. It was simply too many when mixed in with personal budget. So was hoping to split the two, wondering if it's just worth showing the "wages" to ourselves as Cash withdrawal and then just a simple incoming in our personal. Hopefully that makes it a little clearer
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Familyof6 Most people think things are cleaner/easier with separate budgets for business and personal. That mandates separate accounts as well (including credit cards). You can get by using an account that's part of the personal budget for business purchases, and that'll be tracked as a reimbursement -- in both budgets. (Far easier to have separate accounts.)
With separate budgets, your draw is very straightforward. Outflow categorized as Owner Draw, Salary, or whatever in the business budget. Inflow categorized as To Be Budgeted in the personal budget.
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dakinemaui We do have separate accounts/CC etc. The way you have explained it, has answered my question perfectly and will keep them separate moving forward with outgoing/incoming as you described. Greatly appreciate the time to respond to my questions, many thanks!
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