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I arranged my start-up capital through a win-win loan. How do I enter this? First, a large sum of money was transferred to my business from a private person, and now I am paying it back monthly.
I arranged my start-up capital through a win-win loan. How do I enter this? First, a large sum of money was transferred to my business from a private person, and now I am paying it back monthly.
Hi there,
Actually, everything from capital (i.e. the amount without taking interest into account) is totally irrelevant for the accounting of a sole proprietor. It is what you do with the money from the win-win loan that has an impact on your accounts, i.e. the purchases of materials, services, investments, etc.
Those documents will have an impact, but the financial transfer of the win-win loan will not.
But that was for the capital; you also have the interest from that loan, which you can include. You can simply enter it (purely the interest) as expenses. I think there is a cost category for this, something like financial costs or something similar. You can then enter this as an expense on a monthly basis or even once a year for all interest from that year. Hopefully that clarifies things a little.
You really should try it out for yourself. Even if you don’t have a company number yet, you can already go ahead.