personal and business

[Dave T]

Hi Shane,
Thank you for your very helpful reply!

As I reflected on it more, my main requirement concerns credit card
accounts. I find it unavoidable that both personal and business charges
appear on my credit cards. Dealing with that appropriately will be my main
GnuCash challenge, I believe.

Without having used GnuCash, I don't know how others handle this. But I want
to avoid things like this:
- having to manually enter credit card (or other) transactions that could be
automatically downloaded/imported.
- having to download credit card (or other) transactions into two separate
files and then go through both sets of transactions to delete business
charges from one and personal charges from the other.

I believe your suggestions will help me achieve that goal. If I have
trouble, I'll post back.

Happy new year.
Dave

On Mon, Dec 27, 2010 at 5:38 AM, Shane Litherland <
litherland-farm at bigpond.com> wrote:

> Hi Dave,
>
> I've only gone part-way along combining personal/business, i.e. I
> basically use it for business records, but at times I have to account
> for expenses that have a private component, or I make private (cash)
> drawings.
>
> So, how I do this might get you on the starting blocks at least:
>
> example - I get a rates or electricity bill, and most is attributable to
> business expense, but some is private:
>
> LIABILITIES:ACCOUNTS PAYABLE is where I put in the bill (invoice to be
> paid) in its entirety, and split the total:
>
> EXPENSES:PRIVATE DRAWINGS:UTILITIES:RATES (say, 10% of total)
> EXPENSES:UTILITIES:RATES (the business amount, 90%)
>
> (i've glossed over the inclusion of GST or similar taxes to keep this
> example clearer to start with)
>
> I currently pay the bill 100% from my business cheque account
> ASSETS:CURRENT ASSETS:CHEQUE ACCOUNT
>
> You could add a 'PRIVATE SAVINGS ACCOUNT' to your assets tree, and e.g.
> pay the relevant bills or portion of bills from each asset account.
>
> To keep my whole expenses reports 'clean' for business reporting (i.e.
> only showing expenses that relate to business, not the private
> expenses), I do a transfer at the end of each period (in my case,
> financial year) from each EXPENSES:PRIVATE DRAWINGS:... subaccount, to
> an EQUITY:PARTNER CONTRIBUTIONS:... subaccount
>
> If you don't mind having e.g. expense reports that show combined
> subtotals etc of private and business subaccounts then you can probably
> omit the latter step. Another variation, is to do the transfers to
> private equity, and if you want to run a report only showing business
> stuff, put an amount in for the transfer. If you want to 'see' the
> private amounts included in expenses and not bundled up in equity, just
> change the amount back to 0 if or when you want to run said reports.
>
> I have another situation in Gnucash accts where some of my 'business'
> income has to be attributed to me as 'personal services income' (e.g.
> consultancy/sub-contractor income) and reported on my personal tax
> return. For GNUCASH purposes, it is part of my business income/costs,
> but I have a string of about three sub-accounts to document that
> 'private income' amount from the business INCOME account, to a
> LIABILITIES:PSI ATTRIBUTABLE and then on to EQUITY:MY CONTRIBUTIONS and
> EQUITY:RETAINED EARNINGS.
> This results in my 'equity / retained earnings' being a balance between
> the 'personal services income' and the amounts of any private
> expenses/drawings at the end of each period when I do any balancing
> transfers as mentioned above. This whole process probably warrants its
> own discussion so if you find you might be heading down that kind of
> path with your accounts trees, let me know, otherwise just consider it
> 'food for thought'.
>
> A final note, is that I enter all expenses as invoices, and use that
> aspect of GNUCASH that makes use of A/P and A/R but you can still go
> through the same process I've used by just entering split txns directly
> into a liabilities account/s.
>
> Leave it at that for you to digest, let us know if it's any use :-)
>
> -Shane
>
>