What are transaction categories?
Financial statements for your management company are available for download directly from your AngelList dashboard. These include a profit and loss statement, balance sheet and cashflow statement.
These statements are generated based on the transactions listed in your dashboard as well as any transactions from other accounts (e.g. credit cards, out-of-pocket expenses, etc.) you share with AngelList.
They are also generated based on the categories assigned to each transaction. For example, transactions labeled:
- "Management Fee Payments" will be included in the calculation of Total Income reported on your profit and loss statement
- "Owner Drawing" will be included in the calculation of Total Equity reported on your balance sheet
Financial statements are necessary for tax reporting. Therefore, accurately categorizing transactions is critical for accurate tax reporting. In the examples above, they (1) identify income to be reported, and (2) determine how that income is allocated to each owner.
Financial statements are also important for understanding the financial health of your management company.
How do I categorize transactions?
Where possible AngelList will automatically categorize transactions for you. In some cases, you will need to verify these categories or inform AngelList on what the category should be.
The following tables list the categories available to select for a given transaction and in what cases you may want to select a category.
The following are categories related to income earned by your management company. Management companies structured as Limited Liability Companies (LLCs) do not themselves pay taxes on income (unless electing for a different tax treatment). Rather, the owner(s) of the management company pay taxes on the income earned.
|Management Fee Payments
Money received from management fees
Money received from carry
Money received from other sources
Money that cannot be automatically attributed to a specific source
The following are categories related to expenses incurred by your management company. Expenses are usually deductible from your taxable income provided that they are business expenses related to the operation of your management company. If an expense is un-related to your management company (e.g. personal, living or family expenses) please indicate accordingly.
|Meals and Entertainment Expense (100% Deductible)
Business meals with employees or contractors (more than 50% of staff present)
Food for company holiday parties
Food and beverages given free to the public
|Meals and Entertainment Expense (50% Deductible)
Business meals with clients
Meals while traveling for business
Business meals with employees or contractors (less than 50% of staff present)
|Meals and Entertainment Expense (0% Deductible)
Personal meals, groceries or snacks
Payments for software or recurring SaaS subscriptions
Phone-related fees and costs
|Content & Professional Development Expense
Payments for books, magazines and journal subscriptions
Conference fees for developing new skills and knowledge
|Advertising & Marketing
Advertisement, brand development
Website-related costs, web hosting and domain costs
Networking and conference fees
Business-related travel expenses including:
Transportation fees (e.g. plane tickets, ride share fees, etc.)
Hospitality expenses (e.g. hotel fees)
Payroll payments to employees
|Payroll Tax Expense
Payroll-related tax payments
|Payroll Processing Fees
Payroll provider fees
Bank & Credit Card Fees Expense
Bank account maintenance, overdraft, wire fees, etc.
Business credit card fees
Payments for renting space used only for your management company
Payments for company-related insurance services
|Legal & Professional Expense
Payments for company-related legal services
Payments for company-related audit services
Payments for company-related accounting services
Payments for taxes owed by the company
|Business Gift Expense
Gifts for associates, clients and employees to promote business relations
|Charitable Contribution Expense
Donations or grants to tax-exempt entities, endowments, etc.
Expense for something that doesn't fall in the above buckets
Expense that cannot be automatically attributed to a specific source
Expense that is not related to your management company (e.g. personal, living, family, other business, fund)
The following are categories related to equity held in the management company. For management companies with more than one owner, equity determines for each owner their capital account and allocation of income and expenses.
Capital contributed by the owner to the management company
Capital withdrawn by the owner from the management company
The following are categories related to liabilities held by the management company. In each of these cases, please share with your account manager details on the transactions incurred.
|Credit Card Payment
Payment to pay off transactions incurred on behalf of the management company by a credit card
Payment to pay off out-of-pocket transactions incurred on behalf of the management company by an owner
Payment to pay off out-of-pocket transactions incurred on behalf of the management company by an employee
Payment to pay off out-of-pocket transactions incurred on behalf of the management company by someone else
Please reach out to your account manager if your management company is in possession of any of the following assets:
- Bank accounts opened independently of AngelList
- Tangible assets (e.g. laptops, office furniture, etc.)
- Intangible assets (e.g. licensed software)
- Investments (e.g. your management company is invested in a fund on AngelList or holds crypto assets)