Introducing Cash

This article explains how you would show cash being introduced into your accounts.

 

In the Basic Sole Trader package you don’t need to enter the cash introduced at all. As there is no separate corporate entity and any cash is yours whether lent to the business or left in your account. It’s only the profits from trading that incur a tax liability irrespective of whether a loan is settled or not. If you don't make the money back in the first year your business would declare a loss (having spent more money that was earned). So you don't loose the ability to take the funds out without incurring a tax liability you'd need to carry the losses forward into the next year.

Similarly, a business loan remains your personal liability even when spent on the business. You should be able to include the any costs of borrowings (interest charges) as an expense but you don't need to track liabilities between yourself and the business.

Our Self Employed package includes a business bank account reconciliation feature which will show cash introduced along side the financial health check in the monthly profit and loss. In the Basic Sole Trader package you don’t need to mention the personal cash involved.

 

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