Owner's Withdrawal

The owner’s withdrawal (or draw) account is essential for managing finances as a sole proprietor. Setting it up correctly in Bkper lets you track money taken out of the business for personal use while maintaining accurate financial records.

Setting up the account

The owner’s withdrawal account is a liability type account (yellow in Bkper) grouped under Owner’s Equity.

Note

An owner’s withdrawal account can alternatively be created as an asset type account (blue) representing a “receivable” to the company. However, since withdrawals directly reduce owner’s equity on the Balance Sheet, it is more logical to include it in the Owner’s Equity group as a liability type account.

How it works

Owner’s withdrawal accounts are contra equity accounts — they reduce the owner’s equity, which from the company’s perspective is a liability.

When you make a capital contribution, the movement flows from the owner’s equity account to the bank account, increasing the owner’s stake in the business.

When you make a withdrawal, the movement is reversed — from the bank account to the owner’s withdrawal account, decreasing the owner’s equity.

Recording transactions

Capital contribution — adding funds to the business:

Date	Amount	From Account		To Account	Description
01/09/2023	5,000.00	Owner’s Equity	>>	Bank Account	Capital contribution

Owner’s draw — withdrawing money for personal use:

Date	Amount	From Account		To Account	Description
01/09/2023	2,000.00	Bank Account	>>	Owner’s Draw	Personal withdrawal