How do I record owner's draws and owner's contributions in Zoho Books?

Record owner's draws as money out of a bank account and owner's contributions as money in, using the owner drawings and owner's contribution transaction types in the Banking module. Both post to equity accounts, not expenses or income. Make sure the right equity accounts exist in your chart of accounts first, and agree the treatment with your accountant.

An owner's draw is money the owner takes out of the business for personal use. A contribution is money the owner puts in. Neither is an expense or income, so they should not appear on the profit and loss. In Zoho Books they post to equity accounts on the balance sheet, typically a drawings account and an owner's equity or capital account.

Start in the chart of accounts and check that suitable equity accounts exist. Then open the bank account in Banking, add a transaction, and choose the owner drawings type under money out or the owner's contribution type under money in. Pick the equity account, the date and the amount. If the money already came in through a bank feed, categorise the feed line the same way instead of creating a duplicate.

For partnerships or companies with several owners, create a separate equity account for each person so balances are easy to follow. Payments made personally on behalf of the business, such as a supplier paid from a personal card, can be recorded as a contribution plus the matching expense. Rules differ by country and business type, so confirm with your accountant how drawings should be closed at year end.

Written by Flowpeak, a Zoho implementation partner. Zoho pricing and features change, so confirm current details on the official Zoho site. Free checklists | Ask us a question