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Community > Small Business >

Help with cash drawings for sole trader.

Started by Harry Sampson -   in Small Business

Hi,

I am a sole trader and when I am paid with cash I will occasionally spend it. At the moment I then draw the money out from personal account and then pay it back in to business account but would like to mark as drawings.

I am chiropractor and my clinic software works with xero. Transactions from my software go into a checking account as a debit and then when I pay cash into my account I reconcile it to the appropriate checking account where it appears as a credit.

I have followed the instructions from Xero about how to do drawings and I marked the account as my cash account but it is going into the cash account as a debit rather than a credit. Any help would be much appreciated.

Harry
Hi Harry

One way to handle this would be to create a Petty Cash Account in the same way as a bank account. Once set up you can process as follows:

• “Receive Money” for the cash sales into the Petty Cash account coding it to revenue/ sales
• “Spend Money” from the Petty Cash account coding it to drawings

When reimbursing these funds from your personal account into the business bank account you can then “Receive Money” into the bank account coding it to drawings. The net impact (if the same amount taken is reimbursed) will be zero to drawings but the sale is recorded.

I hope this helps.

Jacqui
 

Jacqui Ridsdale  

Hi Harry
Create a sale >accounts>sales>new sale if you have not already.

When you have done so, pay it from your drawings account from within the sales invoice

The reverse applies if you pay a business bill from your personal money. Creat a bill >accounts.>purchases>new bill

Pay the bill from within the bill from your funds introduced account
This was you don' have to bother physically transfering money

Hope this helps
Graeme

 

Graeme Towers