Your balance sheet is not just cash and unpaid invoices. It is also the truck, the building, the equipment loan, and whatever you have put into the business yourself.
Find it at Accounting → Capital & Assets.
A loan payment is mostly not an expense
This is the one most owners get wrong, and it costs money in both directions.
Say your equipment loan takes $945 a month. Of that, $740 is interest and $205 repays what you borrowed.
- The $740 of interest is a cost. It is what borrowing the money costs you.
- The $205 of principal is not a cost at all. You are handing back money you already had. It reduces what you owe.
Book the whole $945 as an expense and you overstate your costs by $205 every month, understate your profit by the same, and your loan balance never moves.
Open a loan and record a payment. Enter what left the bank and how much of it was interest, and the principal is worked out for you so the three always add up.
Balances are true on a date
A loan balance you type in is the balance on the day you looked it up. That date matters, because payments you record after it reduce the balance, and payments before it are already inside the figure you typed.
The screen shows both: what you stated, and what is owed now after the principal you have repaid since. If you ever re-state the balance from a fresh statement, move the date with it and the older payments stop counting.
Keeping personal things out
Most owner-operators have personal and business affairs tangled together. A truck that is really the family car. A house mortgage that ended up in the business records.
Tick Personal on any asset or loan and it stops reaching your business books entirely. No liability, no interest expense, no cash. It is excluded at the record itself, so no report has to remember to leave it out and none of them can disagree.
Untick it and it comes back.
This matters more than it sounds. A personal mortgage sitting in your business debt makes the business look far more leveraged than it is, and every ratio calculated from it is wrong.
Bank transactions are handled separately and already work this way — personal spending, owner draws and transfers between your own accounts are kept out of your profit and loss automatically.
What you own
Equipment, vehicles, property and the rest are carried at what they cost, with depreciation shown against them rather than folded in. Cost and depreciation answer different questions, so they stay apart.
Book value is cost less depreciation — roughly what the thing is worth on paper now.
Depreciation itself is a real cost that never moves any money. It belongs on an accrual profit and loss and stays off a cash one. See depreciation.
Opening balance equity
When you bring something onto your books that you already had — a building bought years ago, a loan taken out before you started here — the other side of the entry has to go somewhere.
It goes to Opening Balance Equity. That account holds what you brought in with you, and it is meant to be looked at and reclassified rather than left forever. Seeing a large figure there is normal when you first enter your assets and loans.
Money you put in and take out
Money you put into the business is capital, not revenue. The business did not earn it, and counting it as income makes a bad month look like a good one.
Money you take out is a return of capital, not an expense. Booking a draw as a cost understates your profit and overstates what the business spends to operate.
Both are recorded on the Owner capital tab, and neither touches your profit and loss.
Who owns what
The same tab lists the owners and their percentages. If they do not add up to 100%, it says so rather than quietly scaling them to fit — a cap table summing to 85% means somebody is missing.
Add or change owners on the officers screen.