Drawings or wages

[Allen0805]

Hello Everyone,

Im a sole trader and i have been posting my income as wages in sage. I have just seen on another post that a sole trader needs to post income as drawings.

Have i been posting incorrectly?

Please help.

Many thanks

 

[JamieAllen]

Any money you withdraw from the business should be posted to drawings and not wages.

HTH

Jamie

 

[MyAccountantOnline]

Hello Everyone,

Im a sole trader and i have been posting my income as wages in sage. I have just seen on another post that a sole trader needs to post income as drawings.

Have i been posting incorrectly?

Please help.

Many thanks

Its a really common mistake - many soletraders understandably think money they take out of the business is wages but it is, as Jamie advises, drawings.
Any private money you take out of the business or any private bills you pay from the business account are drawings.

 

[Mana4tee]

Is there a limit to drawings you can take from your own Company per month/annum? My husband gave up his job to join the Company and we have gone from a sole tradership to a partnership. Thank you

 

[elaine@cheapaccounting]

No limit on drawings in an sole trader or partnership.

Things are different in a limited company

 

[Mana4tee]

Thank you - and wow! Quick response