1. About
Sometimes you or your affiliates may have business transactions that occur outside of your connected accounts such as, if you pay for certain business transactions using a personal credit card or you have certain cash transactions. This article will walk you through exactly how to add or report additional transactions that aren’t synced automatically through your Finaloop integrations.
2. When to report business transactions
Using our Report Transactions tool on the Transactions screen, you can report business transactions paid from or deposited in accounts which are not connected to our banking integration. Here are the most common examples of when you should be recording business transactions:
Business expenses paid by the owner of the business, a related business, employee or contractor (even if the business will reimburse them)
Business income received by the owner (e.g., in a personal account) or by a related business
Expenses paid through a third party lender directly to supplier
Business transaction paid from, or received in, an account that isn't synced to Finaloop (either through an integration or through a CSV upload)
Shared services – for example, if an expense is paid by a related business but part of the expense is for your business and part is for the related business. In this case, you should report the part that relates to the business
Utilities / home office / car expenses paid directly by the owner, which is partly for business uses
Cash transactions that relate to the business
If any of the above cases apply, click on +Report transaction to add the transactions to your books.
Note: If there are a lot of transactions to report, you can share a CSV file instead and we can help you upload it as a credit card (which we can deactivate post-upload so it won’t impact your books moving forward).
3. How to report business transactions
On the Finaloop menu, select Transactions.
Click +Report transaction.
In the popup screen, we'll ask you a couple of simple questions about the transaction so we can report it correctly, such as:
Business reason for this transaction: We'll need to understand who paid for or received cash from the transaction so we can record it in the right place. Was it paid or received by the owner or through a related party, like a related business or a family member of the owner?
Name of the related party: If it was paid by a related party, we'll need to know the specific person or entity (select from the dropdown or start typing a new name)
Transaction details: After providing the details about the person or entity, add the details of the transaction:
Date of transaction
Description: General description of the transaction
Money direction: Was the money spent (i.e., an expense) or received (i..e, income)
Amount: US dollar value of the transaction
Click Next and we'll save the transaction in your books.
Once the transaction is added, you can select the relevant category based on the nature of the expense/income reported. For more guidance, check out this article.
The reported transactions will appear under a dedicated account card right next to your other bank accounts cards and credit cards.
4. How reporting business transactions impacts your books
Reporting expenses
When you report expenses on the Report Transactions tool, the expenses generally create a liability, or a loan, for the business. For example, a $1,000 transaction that was paid by the owner for office supplies with a personal credit card.
Reporting this transaction, results in 2 changes to their books:
Office supplies account in the P&L increased by $1,000
A new loan was created in their balance sheet called Due-to owner - ״name״ for $1,000.
When the business reimburses the owner, this loan balance will be 0.
Reporting income
When you report income on the Report Transactions tool, the income will create an asset, or a receivable, for the business.
For example, let’s say a B2B customer paid an invoice for $2,500 by check and the check was deposited directly into the owner's personal bank account.
Reporting this transaction, results in 2 changes to their books:
For accrual basis users, the Accounts receivable (A/R) - invoices account in the balance sheet decreased by $2,500 since this invoice was paid. For cash basis users, the sales will increase by $2,500.
A loan to a related party is created called Due-to-from owner for $2,500.
When the owner transfers this cash to the business , this balance will be 0.
If you have any questions at all, feel free to reach out to our Support team at [email protected].