Transfers, credit-card payments, and owner draws

Three everyday transactions get miscategorized more than anything else. All three have the same tell: no money actually left or entered your business.

Moving money between your own accounts

Checking to savings, checking to a second business account, an owner moving cash between the two.

• This is a transfer, not income and not an expense.
• Connect both sides and BooksGPT pairs the two rows for you and marks them as a transfer.
• Only one side connected? Categorize the row to the other account by name.

To do it by hand, click the transaction's category and pick the row under Recommended.

Got a pairing wrong? Open the transaction and click Un-match transfer. Both rows go back to To review.

Paying your credit card

The payment from checking to your card is also a transfer. Categorize it to the credit-card account.

• The expense was already recorded when each charge arrived on the card.
• Categorizing the payment as an expense counts the same spending twice, and it is the single most common reason a P&L looks too high.

Taking money out for yourself

Money you take out of the business for personal use is a draw, not an expense.

• Categorize it to Owner's Draw, under the Equity group in the category picker.
• It never touches your profit and loss, because a draw is not a business cost.

Money you put in is the mirror image:

• Categorize it to Owner's Contribution, also under Equity.
• Not income. You did not earn it.

Paying yourself a real salary through payroll is different. That one is an expense.

The quick test

Ask whether the business is better or worse off.

• Cash moved between your own pockets? Transfer.
• Money left the business for you personally? Draw.
• Borrowed money arrived? Liability. See "How to record a loan".
• You actually earned it, or actually spent it? Income or expense.

BooksGPT warns you when this looks wrong. Categorize money going out as income and the picker tells you so before you save it.

Updated on: 03/08/2026