How do I recoup personal money used to purchase inventory that I bought before I opened the store's bank account?
I purchased clothing the previous year and early part of this year in preparation for opening my thrift boutique. I did not have a store bank account at that time. (I do have a store bank account now and purchase all items business related from that account now.) I used my own personal debit card. I have kept all of the receipts. I'm trying to figure out how to handle this situation when it comes to tax filing and for business purposes. For example, if I go the way of making it be a LOAN to the business, can I write out the loan agreement myself? I am the sole owner of the business. It is an LLC.
As long as the items that you purchased with your personal debit card are goods that you normally order for your business, then from an accounting and tax standpoint, you enter this as inventory on the asset side and a shareholder loan on the liability side. Entering it as a loan allows you to readily withdraw this money, as cash flow permits, without any tax implications. These are all standard balance sheet entries, which your accountant can make in the company's financial records.
You may want to consider this purchase as an initial investment and "owner contribution" on your financial statements. You would relocate the cost of the clothes into your inventory, and credit your owners capital account for the same amount, perhaps with a note stating owner contribution at startup. Again, as always, consult with your tax advisor to see if this works for you. Hope this helps.