Transactions from bank accounts are the building blocks of your S Corp's Financial Reports. The type of transaction, and the type of bank account the transaction is in, determines which method Collective will use to get that transaction into your S Corp's Books.
As an S Corp owner, if you take the time to learn these types and methods, you will extract maximum value from your Collective subscription. Your monthly Financial Reports will be more accurate and you'll intuitively understand how to analyze and act on them.
income and expense transactions of the S Corp
income and expense transactions of your personal life
some are common sense, others are decided by the tax code and IRS
specific expenses that have both business and personal use
the IRS allows the business portion of these "mixed" transactions to be calculated and added to the S Corp Books
Bank Accounts Types
Adding Transactions to Your Books
This table lists different methods for how we add transactions to your books. Different methods are needed depending on the mix of Transaction Type and the Bank Account Type.
Bank Account Type
Data Entry Method
The Spreadsheet Import is for exceptions only. As an S Corp owner, you need to have Business transactions occur in Business accounts.
To help ensure your experience at Collective (and beyond) is successful, check out the following examples of transactions. All the nuances are not covered here, but this is a good place to start!
Business Transactions from Business Bank Accounts
Below are examples of expenses that should be paid from business accounts:
Software required for your work
Legal and professional fees such as Collective
Meals with a business associate (for more info on business meals, see here)
Airfare, Hotels, Car Rentals
Job Supplies and Office Expenses
Health, Dental, Vision Insurance Premiums
For more examples of common business expenses, click here. The full chart of accounts used by Collective can be found here.
Personal Transactions from Personal Bank Accounts
Below are examples of expenses that should be paid from personal accounts.
Charitable contributions (non-advertising)
Most food / meals (for business meals, see here)
Direct auto expenses (gas, car payments, repairs, etc.)
Federal and state income tax payments (including quarterly estimated taxes)
All client entertainment that does not involve food
Most subscriptions like netflix, hulu, youtube, spotify, ny times, etc.
Exceptions are discussed here
Accountable Plan Transactions from Personal Bank Accounts
The mixed expenses below should be paid from personal accounts (and then the company will claim a percentage of these expenses via the accountable plan).
Home Office Deduction (Rent, Utilities, etc.)
See here for more info on mixed expenses.