Owner contributions and draws
Owner money changes equity. It is not income and it is not an expense.
Owner money changes equity. It is not income and it is not an expense.
What This Is
A contribution is the owner putting personal cash into the company. A draw or distribution is the owner taking company cash out. Both belong on the Balance Sheet, in equity, not on the P&L.
Tally holds owner rows for a person. It will not pick the equity account to clear the queue.
Why It Matters
Code a draw as an expense and the company looks less profitable than it is. Code a contribution as revenue and the company looks like it earned money it did not.
Personal spend on a company card is still owner money
If the owner bought groceries or a family trip on the company card, that is a draw, not meals or travel. Ask for the receipt, then recode it.
How To Book It
- Read the description. Owner, member, shareholder, draw, distribution, or personal usually means equity. See How Tally codes your bank feed.
- A deposit from the owner credits Owner equity or Contributions.
- A withdrawal to the owner debits Owner draws or Distributions.
- If the company repaid an owner loan, that is a liability, not a draw. Confirm before posting.
- Leave S-corp payroll to Payroll from the bank feed. An owner paycheck is wages, not a draw.
Checklist
- The row is not on the P&L
- The equity account matches how this company is owned
- Personal card spend is a draw
- Owner loans stayed on the loan, not in draws