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Record opening balance

How do I enter a starting balance when I used a payroll deduction from my other work to fund that balance? I'm in Oregon, a friend in Conneticut suggested using a loan from myself for that amount to the business as a starting balance.

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Best answer 02-24-2019

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Established Community Backer ***

Re: Record opening balance

"That payroll deduction was for materials"

Again, there is no Perspective. You won't deduct from an employee's pay, to start a Job. Or, the employee is starting their own business, and again, then, there is no Deduction from Payroll. You use your Paycheck from your existing employer to fund your start up of your new business. So, it still isn't clear why there is the reference to Payroll or what makes anything a Deduction, and deducted from whom, by whom, in relationship to whose Project that who is going to work on?

 

"to do the first job for this business. I'm guessing there has to be some accountability for buying those materials, right?"

 

Yes, any business will track its own financial activities.

 

"Maybe the solution I need to focus on finding is how do I start the books in that instance?"

 

Start "the books" for which entity type? Whose money? What is the relationship of that person to this business entity?

 

"Do I just make a deposit for the needed funds to purchase those materials"

 

You are thinking ahead too far. To do your own tracking, you take it one step at a time.

1. Money from someone got put somewhere.

2. Money from somewhere is being used for something by some entity.

 

You are not literally taking each Dollar by  serial number and using it for the project. You are tracking Values and the Reasons or Why money is moving for each type of activity.

 

"and go on from there or is there something else I need to do? Or can the first entry be paying for those materials?"

 

Well, you cannot enter Spending without also showing where the funds were spent from; that's all part of the tracking. Did someone open a business bank account?

5 Comments
Established Community Backer ***

Re: Record opening balance

You've asked a mix of topics in that question. Let's review:

 

You don't use Opening Balance. You make Transactions for the entries. Example: Add  bank account. Then enter the Deposit for the equity that is in the bank from before your transition to using QB to manage all activity.

 

Your "payroll deduction" from some other employer is Meaningless, here in your own business file. That is how you get Personal funds.

 

Your Friend is not the best source of professional guidance, unless your Friend is also your CPA. Let's review that your business entity type Matters. For instance: A Sole Proprietorship operation cannot be in debt to/from its owner, because there is No Legal Difference between you and the business, You are your business. Example:

 

I put $5,000 into the bank to start up my business. That is Make Deposit, $5,000 is "from" Owner Equity. Equity = it's already My money.

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Re: Record opening balance

Thanks for the response. 

I mentioned the payroll deduction as a basis that that money isn't affiliated with this business at all.

My friend is somewhat knowledgeable on this stuff, but my posting here is because I know he is not the go-to on these answers. 

That payroll deduction was for materials to do the first job for this business. I'm guessing there has to be some accountability for buying those materials, right?  

Maybe the solution I need to focus on finding is how do I start the books in that instance? Do I just make a deposit for the needed funds to purchase those materials and go on from there or is there something else I need to do? Or can the first entry be paying for those materials? That initial method of getting started is what is stumping me.

Thanks again, Loren.

 

Established Community Backer ***

Re: Record opening balance

"That payroll deduction was for materials"

Again, there is no Perspective. You won't deduct from an employee's pay, to start a Job. Or, the employee is starting their own business, and again, then, there is no Deduction from Payroll. You use your Paycheck from your existing employer to fund your start up of your new business. So, it still isn't clear why there is the reference to Payroll or what makes anything a Deduction, and deducted from whom, by whom, in relationship to whose Project that who is going to work on?

 

"to do the first job for this business. I'm guessing there has to be some accountability for buying those materials, right?"

 

Yes, any business will track its own financial activities.

 

"Maybe the solution I need to focus on finding is how do I start the books in that instance?"

 

Start "the books" for which entity type? Whose money? What is the relationship of that person to this business entity?

 

"Do I just make a deposit for the needed funds to purchase those materials"

 

You are thinking ahead too far. To do your own tracking, you take it one step at a time.

1. Money from someone got put somewhere.

2. Money from somewhere is being used for something by some entity.

 

You are not literally taking each Dollar by  serial number and using it for the project. You are tracking Values and the Reasons or Why money is moving for each type of activity.

 

"and go on from there or is there something else I need to do? Or can the first entry be paying for those materials?"

 

Well, you cannot enter Spending without also showing where the funds were spent from; that's all part of the tracking. Did someone open a business bank account?

Not applicable

Re: Record opening balance

Ok, I get it finally. This is not the place to ask for help unless I want to deal with trolls. You keep asking me questions that are answered in my posts. I'm done here.

Established Community Backer ***

Re: Record opening balance

OMG, stop being Rude to peer users that are volunteers here and cannot help without Details.

 

This is Your Topic. If we were sitting in person, you would still need to Answer the same questions.

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