Ambrook comes pre-populated with a number of tags that can be used to record activity to your balance sheet. These are found in the “Transfer” section.
Transfers Between Bank Accounts
The “Account Transfer” tag should be used on any transaction that represents money being moved between two accounts in the Banks & Cash section of your balance sheet. If all your bank accounts are connected to Ambrook, you will most often select “Done” after you select the Account Transfer tag. Because these transactions appear twice in your ledger, once as a positive number in one account and once as a negative number in another, these will offset each other. If the two Account Transfer tags don’t equal out, Ambrook generates a balance sheet account called “Other Account Transfer” which indicates that you need to review any transactions you’ve marked as “Account Transfers” and make sure you’ve tagged it in both instances where you’d expect it to show up in your ledger.
(Screenshot of what you will see in Ambrook below)
A common case where you may take different steps is when you deposit cash to your bank account. If, for example, you have been using your cash on hand account to track payments received for sales, your cash on hand account will be running a positive balance. When you deposit this cash into your bank account, you should tag the deposit as an “Account Transfer” and apply it against your Cash on Hand account. This will reduce the balance of the cash account, which will be reflected by the increased balance in your bank account.
Credit Card Payments
Credit Card Payments typically are made monthly. If you have both a credit card and a bank account connected to Ambrook will appear on your ledger twice. Typically, if you have auto-pay setup with your credit card provider, the payment transaction appears on the credit card feed first as a positive transaction representing the reduction of your balance. Either on the same day, or sometimes a few days later, the withdrawal from your checking account posts as a negative transaction for the same amount. For both of these transactions, you select the “Credit Card Payment” tag and then select “Done” such that the transactions cancel out.
When the two Credit Card Payment tags don’t equal out, Ambrook generates a balance sheet account called “Other Liability Transfer” which typically indicates that you need to reconcile your Credit Card Payment tags. If this happens, there may be missing transactions from either the bank or credit card account, so you should reconcile to rule that out.
Buying a New Asset
If you just bought a new asset and paid it in cash (or with your bank account), that transaction will appear in your ledger from your bank feed. To tag this you would do the following:
Create the asset account (Setting -> Balances -> New Manual Account)
Set the opening date on account to the transaction date and an opening balance of zero.
Find the transaction in your ledger and tag it as an “Asset Transfer”
Select the asset account from the menu to apply the amount of the transaction to the account.
Buying a New Asset with a Loan
Oftentimes assets are purchased with financing, either in full or with a down payment. To represent this on your books you should:
Create two new manual accounts, one asset and one liability, on the date you made the purchase.
If you made a down payment, find that transaction and apply it to the asset account with an “Asset Transfer” tag. This will not capture the full value of the asset.
Go to Setting -> Balances and find your liability account. Click on it to open the account details and select “New Transaction”
The transaction type will be an “Increase (credit)” and the amount will be the initial total of your loan.
When creating the transaction, apply the category tag “Loan Transfer” and select your asset account. The final balance of the asset should be the total cost basis.
If you purchased 100% of the asset with credit you can follow the instructions above but skip the second step.
Making a Loan Principal Payment
Loan payments are typically monthly, recurring transactions. At the end of each month, we recommend gathering up all your loan statements and doing this tagging in one sitting. When you make a loan payment, the total amount that shows up is often the principal and interest portions combined. To tag these transactions, you would:
Find the transaction in your ledger and click on it to open the transaction details.
Scroll down the details pane and select “Add Line Items”
Create two line items, one titled principal and another titled interest. Use the information from your loan statement to fill in the amounts for each. Select “Done” once complete.
This will create two line items on your ledger. Tag the principal portion with the “Loan Transfer” tag, selecting the relevant loan from the menu.
Tag the interest portion with the interest expense tag in your tagger (created as part of your chart of accounts when onboarding).
Note - Some loan providers don’t make it easy to locate the portions of your payment that were principal versus interest. If this is the case for you, reach out to our support team and we will guide you through different options for how to handle this. |
Tagging Owner’s Draws, Contributions or Personal Expenses
Though ideally you keep your business and personal expenses separate, sometimes you might not. Personal expenses made on business accounts are essentially Owner’s Draws. If you are a sole proprietor, you mainly just need to ensure these are omitted from Schedule F, but you also might be interested in seeing what your cumulative draw for the year has been. If you’re in a partnership or LLC, you might need to track these personal expenses to report back to your partner. If either of those are a goal for you, you can use an equity account on your balance sheet.
First you create a new manual equity account (if you don’t already have one from your onboarding). When you come across a personal expense (or deposit) on your ledger, you apply an “Equity Transfer” tag and select the equity account from the menu. Doing this will accrue the balance to that account and keep these transactions off your Schedule F totals.
If you don’t want to track these on the balance sheet, you can also consider setting up Personal Income and Expense as category tags, and select “Non-Schedule F” when it prompts you to select the appropriate schedule F box.