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Withdraw money

Accounting  — Fri 11 Feb 2022

At any time, you can decide to withdraw money from your business. If your company is a sole proprietorship, this is how you pay salary to yourself. In the case of a limited liability company (BV), you often withdraw money temporarily in the form of a loan from your current account. This is because you receive salary from a limited liability company in a different way.

Withdrawing money from a sole proprietorship

On your balance sheet, you should see the category 'Ondernemingsvermogen' on the right side. This category has a subcategory with your name. And this also has three categories: capital, withdrawals and deposits. If you want to withdraw money from your business then this is how you do it:

  • Transfer an amount from a business account to your own account.
  • Make sure the transaction is visible in your accounting records.
  • Link this transaction to the balance category 'Opnames' of the correct person.

That's all. It is also clear now how much you have withdrawn from your business over time. This can be seen on the balance sheet as follows:

Bart € 1,000.00
  Kapitaal € 750.00
  Opnames € 0.00
  Stortingen € 250.00

In this example, Bart has € 1,000.00 at his disposal to withdraw. Bart has previously contributed € 250.00 by depositing it. He also made € 750.00 in profit in a previous fiscal year. Obviously, it is convenient to leave some money in the business so that you can continue to pay your bills and taxes.

Borrowing money from a limited liability company (BV) through a current account.

If you want to purchase something privately, but you only have the company debit card on you, you can borrow from your company. This is interest-free up to a set amount. At the time of writing this is € 17,500.00. If you withdraw more, you are obliged to pay back interest to your company on the full amount.

Purchasing something with the company debit card creates a transaction in the financial account that must be connected. Suppose your name is Bart and you bought a television of € 1,700.00 and paid for it with the company debit card, then you process this as follows:

  • Connect the € 1,700.00 business debit card transaction to the balance sheet category "Bart RC.
  • Now transfer € 1,700.00 from your own account to a company financial account.
  • Make sure this transaction also appears in the accounts.
  • Now connect your deposit to the balance category 'Bart RC' as well.
  • Because the first amount is a withdrawal, and the second amount is a deposit, 'Bart RC' is now back to zero.

That's all. The company advanced your purchase for a while, and afterwards you repaid the company. The current account (RC) with your name returns to zero after both transactions.

It is good to know that a current account has no subcategories for withdrawals or deposits; you book both types of transactions on the same balance category. Each person allowed to borrow from the company has their own current account. You recognize them by the name before the abbreviation 'RC', such as 'Bart RC'.