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Experienced Member

sole trader deposit and withdraw money into business bank account

Hi

I have a question, this is for sole trader business account in Australia.

if the sole trader deposit money into the business account, which account does it go into?

and sometimes also transfer money out from business account to his personal bank account, which account does it go into? 

thank you

Helen

4 Comments
Established Community Backer ***

Re: sole trader deposit and withdraw money into business bank account

deposit into the company is equity investment

take from the company is equity draw

 

For a company taxed as a sole trader, I recommend you have the following for owner/partner equity accounts  (one set for each partner if a partnership)

[name] Equity (do not post to this account it is a summing account)
>> Equity
>> Equity Drawing - you record value you take from the business here
>> Equity Investment - record value you put into the business here

 

Experienced Member

Re: sole trader deposit and withdraw money into business bank account

hi  thanks

but this is not a company structure for the business, i know we put the owner deposit into director loan account. 

for sole trader, the business structure is sole trader ( ABN is under his personal name), can i code the owner's deposit into owner's loan account ?

Helen

QuickBooks Team

Re: sole trader deposit and withdraw money into business bank account

Hi Helen, Thank you for following up on this. I found this article from our community that might be useful for you:

About mixing business and personal funds

https://quickbooks.intuit.com/community/Getting-started/About-mixing-business-and-personal-funds/m-p...

 

I would also like to suggest you consult with your accountant on how your transferring funds between personal and business account should be recorded.

 

Hope this helps and please let us know if you have any questions on this. 

Established Community Backer ***

Re: sole trader deposit and withdraw money into business bank account

@Helen K 

 

A director loan account would be used if the company was taxed as a corporation (LTD)

 

a sole trader uses the equity accounts, you are the business and you can not borrow from yourself

 

but the absolute final answer would best be from your local tax accountant