What leaves, and what the shop spent
Owners move money home because the household has bills. That transfer is real. It is not, by itself, a cost of making the sales. If we drop it into supplies or into a miscellaneous pile, profit falls on paper and the cash story gets harder to tell.
A cost is something the shop consumed. Inventory, a contractor's invoice, the software that keeps the schedule, the meal where you actually sat with a customer. A draw is the member taking profit, or taking capital, out. Both can happen on a Tuesday. They do not share a line.
We look at the payee and the reason, not at the dollar size. A small transfer can be a draw. A large check can be a cost. The bank feed will not label them for you, and a rule that says 'everything to this person is an expense' will be wrong by spring.
How the books show it
On a disregarded company the draw usually lands in equity, not on the profit and loss. The profit and loss then shows the shop. The balance sheet shows what the member has already taken. When those two agree with the bank, the return has something solid under it.
Personal cards are the usual leak. A tank of fuel for the family car, a grocery run, a subscription that never touched the shop. We pull those out of the company totals. If the company truly paid a personal bill, it is still a draw, not a quieter category.
The form on this page is a picture of a federal credit form. It is here because one paper is easy to mistake for the whole evening. A meal with a customer can be a cost. The cash you took home after is not that meal.
What we need from you
A month of the company account and a note about anything that went to the household is enough to start. Recoding the year yourself is not the price of a first conversation. The transfers are more useful to us than an export that has already hidden them.
If a bookkeeper before us called the draws 'owner expense' for a long time, we do not scold the file. We pick a month, fix the map, and carry the map forward. Old months get corrected when they still change the return you have not filed. Closed years get a different conversation.
Read what a closed month is once the piles are separate.
The close is much calmer when draws already have a home.
Tell us how money leaves
A note about draws sit in their own pile is enough for us to start from your file.