Do We Pay Ourselves Back for Any Personal Money We Invest in Our Business?
Do we pay ourselves back for any personal money we invest in our business?
This is a great question—and it came up specifically in a Facebook group where someone was asking about it in relation to an LLC. But honestly, it’s relevant to a lot of the clients I work with, whether they realize it or not. That’s why I wanted to dive a little deeper into this one.
If you use personal funds to pay for things in your business—especially when you’re first starting out—that’s technically considered an investment into your business. You’re supporting it, or “floating” it, until it starts generating income. So, the short answer is: it depends. It really comes down to what you want to do.
You have a couple of options. First, you can simply leave it as an investment. That’s totally fine. Many people invest their own personal money to cover startup costs, and there’s nothing wrong with letting it stay categorized that way.
Or, you can choose to pay yourself back. In that case, you’d just transfer the funds from your business account back into your personal account. It’s essentially like you personally loaned money to the business. Now that the business has cash available, it’s repaying the loan. Simple as that.
Now, if you’re wondering how to categorize that in your bookkeeping software—or how to set up the right accounts in QuickBooks if they’re not already in place—this is exactly the kind of thing I cover inside my program. I walk you through how to create and organize categories, how to handle transfers between personal and business accounts, and how to make sure your books stay clean and clear.
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