the sole partner of a business (GP practice) has paid for personal expenses through the business. Expenses include travel, food, telephone and internet costs.
I am wondering how to record these expenses so that they are clear for the accountant. Would it be drawings? For now I have set up a separate expense account called Drawings: personal expenses (name of partner) and coded these expenses to that account to differentiate between personal and business expenses.
It may be a complicated matter but can anyone guide me on what is appropriate for a partner to draw?
Your treatment of these transactions is correct. Any personal expenditure from the business account should be recorded as drawings. It would probably make sense to add some detail, for example the name of the payee. If it's personal expenditure there is no need to have the receipt, or any details about what was purchased, but by recording the name of the outlet you have some details useful details to show to the accountant or your client. Just one point - are you sure the expenditure is all personal? The accountant might have advised the GP he can claim some of these items as business expenditure.
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Sheelagh Lyons Bookkeeping Clarity Making Bookkeeping Clearer
The answers I provide are meant as a general guide only and do not constitute advice.
It is a single-handed GP. I hope partnership is the right term? There were three partners now just one remains.
Yes I need to clarify if one or two are indeed business or personal. E.g. some travel (rail) was to a work related conference, so I assume that would be business expense. Home wi-fi set-up and subscription - I am not sure as it is used for both personal and business. I have put it as personal as I believe the partner is going to claim as a personal expense on his tax return.
Sorry to be pedantic!
