Using Equity Contributions To Fund Investments/Expenses?
Hello! My partner and I just transferred over to Zoho Books and are trying to figure out how to adapt it to our business model.
We currently fund the company as individuals and utilize those funds to:
1) Cover OPEX
2) Invest in companies.
- I recorded an Owner's Contribution (total cash input into the business by one partner) and it went to their equity account.
- I recorded an expense (investment into another company) and marked it as "Pay Through" the same partner's equity account.
The issue however is that when I go to that Partner's Equity Account in "Chart of Accounts", the expense (investment into another company) is credited instead of debited. So it shows the total amount in the account as the contribution PLUS the expense.
How can I show that the investment into another company is coming out of a partner's equity account?
If the above method is not the best practice, would you please generally explain the best way to go about:
1) Recording our owner's contributions into the fund?
2) Utilizing those owner's contributions to invest in other companies?
Thank You!
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