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Intuit

How to pay for business expenses with personal funds

While it is not advisable to mix personal and business funds, you may encounter situations that will require you to do so.

To record a business expense paid for by personal funds, you have to first record the expense, and then you must record the partner or owner's reimbursement for that expenditure.

You can record the reimbursement either as a cheque or as an expense.

Record a business expense paid with personal funds

To record a business expense that was paid for by a partner or owner's personal funds:

  1. Select the Plus icon (+) on the Toolbar.

  2. Under Other, select Journal Entry.

  3. On the first line, specify the appropriate expense Account for the purchase.
  4. Enter the amount of the purchase in the Debit column.
  5. (Optional) Enter a customer Name to associate the expense with a customer.
  6. On the second line, in the Account column, enter the Owner's equity or Partner equity.
  7. In the  Credit column, enter the amount of the purchase.
  8. (Optional) In the Memo field, add Reimbursable to help you identify the transaction later.
  9. Select Save and close.

Record the reimbursement as a cheque

To reimburse the owner by cheque:

  1. Select the Plus icon (+) on the Toolbar.

  2. Under Suppliers, select Cheque.

  3. (Optional) In the Choose a payee field, enter the name of the partner/owner.
  4. Select the Bank Account you are reimbursing from (you can also use petty cash).
  5. In the Account column, select Partner's Equity or Owner's Equity.
  6. Enter the Amount of the reimbursement.
  7. Select Save and close or Save and new.

Record the reimbursement as an expense

  1. Select the Plus icon (+) on the Toolbar.

  2. Under Suppliers, select Expense.

  3. (Optional) In the Choose a payee field, enter the name of the partner/owner.
  4. Select the Bank/Credit account you are reimbursing from (you can also use petty cash).
  5. In the Account column, select Partner's Equity or Owner's Equity.
  6. Enter the Amount of the reimbursement.
  7. Select Save and close.

Now you know how to reimburse partners and owners for an expense paid for with personal funds.