Question

After consulting with my accountant in the US, I learned that as a sole member of my company, I should refrain from paying myself a salary that affects the direct expenses account. Instead, I should opt for a “draw” that impacts the balance sheet rather than the expenses. Could you please provide guidance on how to configure this in BizCentric?

Answer

1. Create an account for Owner’s Equity under Liabilities if you already do not have. This account will be your investment in the business and the accumulated profits (or losses). It will have a “Credit” type balance.
2. In a Version 5, Equity will be a new head (not under Liabilities).
3. Create an account for Owner’s Draws under Owner’s Equity.
4. Note that the balance of Owner’s Draws will always be negative since you are reducing money from your total equity / profits.