How to add personal money to small business

[Robert Heller]

At Fri, 4 Apr 2008 13:30:02 -0700 (PDT) Myrion <myrion at cerephax.com> wrote:

> 
> 
> Hello,
> 
> I can't seem to find an answer to this seemingly easy question:
> 
> I am using GnuCash (2.2.3) to keep records for my small business. However,
> as with many new small businesses, the income I generate isn't enough to
> cover the expenses. Therefore I must put in some money I generate from my
> normal day job (which is a bi-weekly paycheck that has been taxed). 
> 
> So I guess my question is:  Since my day job income isn't part of my small
> business income, where do I place it in GnuCash so that it is just there to
> cover expenses that I have to pay? I deposit cash into my Business Checking
> account so that I can cover the expenses of the business. Remember, this
> isn't actually income from the business though, and it has already been
> taxed through my employer. 
> 
> Whenever I try to just make a deposit into the Business Account in GnuCash,
> it wants to know from which account I'm drawing these funds. But since it
> isn't an account, it's simply outside cash being deposited, this is where I
> get confused.

You need to create an account, probably a liability account, since it is money
the business 'owes' someone who is an investor: you.  Call it 'owner
investment' or something like that.  Think of it as a kind of interest
free loan with really libreral payback terms.  If/When your small
business starts making a profit, you can 'pay down' this liability.  If
your net profit starts to regularly exceding any 'investments', you can
think about quiting your 'day job' (don't really do this until you have
a really comfortable and steady margin though).

> 
> Any help would be most appreciated!
> 
> Thanks!
> 

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