Sometimes you want your accounting to show that you've paid yourself without actually transferring the money. Here is how to do that kind of thing with Xero. The scenario is that some money was deposited into a personal account that was intended for the company. The company owes the person money anyway, so we'll just net it off in XERO to show the money owed was paid and a simultaneous payment was made to the individual
Mark your invoice as having been paid
Visit the invoice which needs to be paid and mark it as paid. Enter your company bank transaction account in the Paid To column
Create a new Spend Money Transaction
We'll balance out the phantom invoice payment with a phantom payment to the employee (or Director) that received the invoice payment to their personal account.On your Transaction Bank Account create a "Spend Money" transaction
Fill out the Spend Money transaction
The account should be one that represents real payments to your Directors. We've created our own account called Directors Bonus, but you might have your own standard accounts for such things.That's it. You'll see that the invoice payment and this spend money transaction balance each other out. It is just as if someone paid the invoice into the bank account, and you withdrew it on the same day.
