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Level 1

Income and Expenses Before LLC Formation/Business Checking Account

I recently formed an LLC as a sole proprietor. Prior to the formation of the LLC, though, I made some investments using my personal checking/savings accounts:

  • Filing fee with the state
  • Website building software, hosting, etc.
  • Google Workspace signup
  • Domain name registration

I created a payment account for my personal checking account and have begun entering these as expenses, but I'm unsure what to enter in terms of the balance for the payment account. Can I just leave that at $0?


I also had some existing clients that I had started working with prior to its official formation pay me shortly after formation, but before I had a business checking account. These were sent via Apple Cash and ACH to my personal checking account. Since they were paid after formation, though, I want to make sure they're recorded correctly. I guess I'm just looking for the best way to do this... Should I enter these as paid invoices and then enter an owner's draw to my personal checking account?

1 Comment 1
Level 15

Income and Expenses Before LLC Formation/Business Checking Account

Assuming a payment account means a bank checking account, then after you have all the expenses entered there will be a negative balance. Make a deposit and use owner equity investment as the source account for the deposit

Record the receipt of the payments and use owner equity drawing as the deposit to account.

Your personal accounts are never included in business accounting.

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