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amorenoBK
Level 1

How to record an owners draw

My client withdraws cash from the business to pay for a personal expense monthly so she can work. I've seen the answer of using a check to record an owners draw and apply it to the Owners Draw account, does this work the same if she is withdrawing cash? Bookkeeper before me recorded them as transfers and expenses. Some were transfers from the business account to her personal account however some were cash pulls from the ATM. How do I record an Owners Draw that is a cash withdrawal from the bank?

2 Comments 2
john-pero
Community Champion

How to record an owners draw

Emily Dickinson famously said "An Owner Draw is an Owner Draw is an Owner Draw" The method of an owner withdrawing money or having their business pay for their personal expenses does not change. A check, echeck, transfer from business banking direct to personal banking, cash out of ATM, it is all the same.

 

I would suggest that you could treat an ATM withdrawal temporarily as a transfer or deposit to Petty Cash or Cash on Hand account until disposed of.  For convenience an owner will buy something for the business with cash and you would use the Cash account to record the expense. Anything left over is Draw

amorenoBK
Level 1

How to record an owners draw

Thank you!!! 

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