Proper Accounting of Business Loans Will Help Save Time and Money Down the Road

As new businesses are starting out, it can be difficult to establish a steady cash flow to cover expenses. Business owners often want to “lend” their business money here and there to make sure the company stays operational. In many cases, where the business only has one member or owner, these loans go undocumented and no interest is paid when the principal is paid back. Once you decide to use your personal funds to invest in your business, you’ll need to work with your accountant to determine if the money should be treated as equity or as a loan to the...