Withdrawal

Withdrawal is money taken out of your business bank account or cash till. It is a bank or cash movement, not an invoice. A withdrawal only affects profit if it pays a genuine business cost. If you take money for yourself, it is not a business expense.

The treatment depends on the business type. For a sole trader or partnership it is usually recorded as drawings. For a limited company, money to an owner should be posted as payroll, a dividend, or an expense reimbursement — not as drawings.

How to treat common withdrawals in your books:

• Cash for petty cash: record as a transfer between bank and cash.
• Owner taking money (sole trader/partner): post to drawings/capital, not to expenses.
• Paying a business cost: post to the correct expense or to a supplier bill.
• Company owner taking money: record as payroll, dividend, or expense repayment.
• ATM cash without a receipt: explain it clearly or treat as drawings if personal.