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I purchased some groceries for my neighbour, and he reimbursed me by depositing funds into my business bank account (I have done some work for him occasionally), which automatically fed through to Xero. The transaction will look like sales in Xero, so I need to do something with the transaction to prevent that.

How do I label the transaction in Xero?

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  • Issue an invoice for the groceries?
    – littleadv
    Commented Mar 28, 2023 at 21:52
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    @littleadv In that case I couldn't claim back the GST on them, as I didn't keep the receipt. It wasn't a business transaction.
    – Highly Irregular
    Commented Mar 28, 2023 at 22:11

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I haven't used Xero yet myself, but in general accounting terms, that was someone putting money belonging to your personally in to your business bank account. In effect, it's as if you moved some of your personal money into your business.

So just in pure accounting theory, you would credit your owner's equity account if you have one, wherever your investments in to your company were booked.

There should be an account in Xero that is something like 'Owner's Investment' or something like that.

Hope that helps!

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  • That should be the opposite of what dict.cc/?s=Privatentnahmen translates to "private drawings" or "personal drawings". "Private/Personal contributions" maybe?
    – glglgl
    Commented Mar 29, 2023 at 14:17
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    Brilliant, thank you. I think that will tidy things up perfectly.
    – Highly Irregular
    Commented Mar 29, 2023 at 21:23

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