There are two methods available for handling the accounting in the equity section of a set of accounts for a partnership. These options have implications for how you generate financial reports from the LodgeiT Reporting module.

Option A - Reflect only the closing balance of the partner - (watch the video)

Pros - 
  • Simple to handle in accounting software
  • Less line items mean less confusion for novice users
Cons - 
  • More tedious in the LodgeiT Financial  Reporting module
  • Won't support automated post-back method

Option B - Reflect all sub-accounts of the partners, including share of profit, capital introduced and drawings - (watch the video)

Pros - 

  • No need to make any manually value entries in LodgeiT
  • Provides granular account detail i.e. profit reflects in a profit account
  • Supports automated postback (coming to LodgeiT soon).

Cons - 
  • More tedious in the accounting software (unless there is auto-postback functionality from LodgeiT)
  • Requires adjusting entries to move prior year balances to an opening balance account for each partner