personal and business

Elizabeth Dodd edodd at billiau.net
Tue Dec 28 14:36:16 EST 2010


On Tue, 28 Dec 2010 14:18:43 -0500
Dave T <dave at davestechshop.net> wrote:

> 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
> >
> >

I keep quite separate books. I hand enter all transactions.
The credit card is in the personal books. Things for work are marked
Expenses:Business
In the business set of books is Internal Loan.
Here I list all the stuff I bought for the business, and split off the
tax component. Periodically I repay the loaned moneys and enter this
appropriately. Ideally Internal Loan and Expenses:Business have the
same total, but one is negative and one is positive.


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