Thanks for getting back to me, @nbishop_springboardssolns!
Yes you're correct! It shows what the business actually spending.
To handle the owner's contribution, you need to set up an owner's draw account as an equity account. An equity account used to track withdrawals of the company's assets to pay an owner. If you're a sole proprietor, you must be paid with an owner's draw instead of employee paycheck.
To create an Equity account, here's how:
- Click the Gear icon, then select Chart of Accounts.
- Click New.
- From the Account Type drop-down, select Equity.
- From the Detail Type drop-down, choose Owner's Equity.
- Enter an opening balance.
- Click Save and Close.
After creating the account, you can write a check from an owner's equity account to pay them.
You can read through these articles for detailed information:
Most importantly, I still recommend checking with your accountant for more guidance. He/she may add suggestions based on what's more suitable for your business and to your books.
Feel free to let us know if you have any other concerns. We'll be here to help you. Have a wonderful day!
