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Accounting for Owners Hours Spent

How do you handle a request by business owners requesting that their weekly hours spent on the business be entered in the accounting software?

Is it acceptable to be expensing for hours spent on business by the owners?

Also in a situation where they teach at their own institution but due to cash flow issues do not collect salary or invoice for their tutoring , is it acceptable to account for their invoices as owners without been employees of the same company?

Answers

Anonymous
(VP) |
Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

There are many ways to "account" for owners time spent. The question is whether it is in the financial or managerial accounting aspect of the system.

Also, not knowing the legal status of the company makes the question very broad. In a corporate entity, one could account for Payroll payable, as an example.

In the final analysis, what is he/she trying to document/prove?

Anonymous
(VP) |

Wayne, thanks for your response.

They are trying to accrue their time so that they can have it on record that the company is owing them money.

But they are not employees but owners.

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

Use a product like Freshbooks or Harvest, which a T&B saas products.

Record the time, run a monthly report and make it part of the corporate records.

Again, if they aren't Employees, then unless they have a partnership/member agreement that changes their rights to profits, they are deluding themselves.. and creating extra work.

BTW, who is approving the "time"??? each of them for themselves :)

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