# Owner's Withdrawal

The owner's withdrawal (or draw) account is essential for managing finances as a sole proprietor. Setting it up correctly in Bkper lets you track money taken out of the business for personal use while maintaining accurate financial records.

## Setting up the account

The owner's withdrawal account is a **liability type** account (yellow in Bkper) grouped under **Owner's Equity**.

> **Note**
> An owner's withdrawal account can alternatively be created as an asset type account (blue) representing a "receivable" to the company. However, since withdrawals directly reduce owner's equity on the Balance Sheet, it is more logical to include it in the Owner's Equity group as a liability type account.
## How it works

Owner's withdrawal accounts are **contra equity accounts** — they reduce the owner's equity, which from the company's perspective is a liability.

When you make a **capital contribution**, the movement flows from the owner's equity account to the bank account, increasing the owner's stake in the business.

When you make a **withdrawal**, the movement is reversed — from the bank account to the owner's withdrawal account, decreasing the owner's equity.

## Recording transactions

**Capital contribution** — adding funds to the business:

| Date | Amount | From Account | | To Account | Description |
| --- | --- | --- | --- | --- | --- |
| 01/09/2023 | 5,000.00 | Owner's Equity | >> | Bank Account | Capital contribution |

**Owner's draw** — withdrawing money for personal use:

| Date | Amount | From Account | | To Account | Description |
| --- | --- | --- | --- | --- | --- |
| 01/09/2023 | 2,000.00 | Bank Account | >> | Owner's Draw | Personal withdrawal |