Hi and thanks in advance for any help you can give!
I have inherited the bookkeeping for a small business, and I can't work out what is going on with the way owner drawings have been recorded.
Instead of going through 'spend money' and paying the money to the owner and recording it as Equity / Owner Drawings, there has been a sort of 'fake' bank account set up and any drawings from the business have been recorded as a bank transfer into this account. This has also included the owner's super.
The business owner has no idea why it was done this way, and as the practice is now nearly 4 years old there is a considerable sum of money 'in' this account. Apparently this was originally set up by an accountant, so there must surely have been a particular reason? Perhaps they assumed there would need to be a lot of transfer back and forth at first between the owner's personal and business accounts?
How should I approach untangling this? Can I go ahead and start recording owner drawings as... well... drawings? What do I do with the faux bank account now?
Thanks again!