Founder-paid startup costs should be recorded in a clear schedule while the company bank account is being opened. Keep the supplier documents, identify who paid each item and record the intended treatment. Moving cash to the founder later does not prove every payment was a company expense, a loan repayment or a deductible cost. The underlying facts need to support the entry.

Hands signing a document at an office desk
Illustrative photograph by Pavel Danilyuk.

Start with the entity and timing

Identify whether the company existed when the cost was incurred and who contracted with the supplier. Costs incurred before incorporation can raise different questions from expenses paid personally on behalf of an existing company. Ask the accountant, and where needed the company secretary or associated legal adviser, to review the documents before the company adopts a treatment.

Build a founder-payment schedule

  • Supplier and document reference.
  • What was purchased and for whose business purpose.
  • Invoice customer and date.
  • Person who paid, payment date and evidence.
  • Proposed reimbursement or funding treatment and approval.

Keep each founder’s items separate. A single spreadsheet total called “startup costs” is difficult to verify later.

Separate expenses, assets and funding

A laptop, refundable deposit, professional service and share subscription should not all be posted to one expense account. Nor should all personal payments be called paid-up capital. The accountant should assess each item, while the secretary handles any necessary corporate approvals or share records. A bank transfer description does not create a share allotment.

Illustration: two founders pay different costs

One founder pays a supplier for company software after incorporation; the other pays a refundable premises deposit. Preserve the two source documents and proof of payment, then agree the appropriate accounting entries and who is owed what. If the company later repays only the first founder, the second balance should remain identifiable rather than disappearing into a net total.

When the bank account becomes available

Approve reimbursements through the company’s normal process and match each payment to the schedule. Prevent an administrator from paying the original supplier again after the founder has already settled the invoice. Reconcile any unresolved amount at the first month-end and keep the explanation with the opening records.

Do not promise tax deductions

Bookkeeping recognition and tax deductibility are separate decisions, especially for pre-incorporation, private, capital or mixed-purpose costs. Give the accountant the actual evidence. See paid-up capital and the bank account, bookkeeping basics and company recordkeeping for related guidance.

Official guidance: IRAS company recordkeeping requirements.

Help with your company records

For accounting and bookkeeping support, contact Raffles Corporate Services at [email protected] or WhatsApp +65 8501 7133. Tell us which records or transactions need attention so we can discuss the relevant next steps.