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What happen when employee used company's card for personal use, but then pay it back? How should it be recorded?

 
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QuickBooks Team

What happen when employee used company's card for personal use, but then pay it back? How should it be recorded?

Hi there info1396,

 

I'm delighted to see that you've chosen QuickBooks Online to manage the bookkeeping for your business. A big part of bookkeeping is tracking money in and money out from the business and its resources so that you can accurately report the business activity to the government. The software is designed to make this as simple as possible, and I'd be happy to help you with this situation of the employee having used a company credit card for personal use.

 

Whether you should record a transaction and how it should be recorded are great questions for an accounting professional as they'll know the kind of paper trail that the government is looking for in case of potential audits. While I can advise you how QuickBooks Online's features work and how to navigate to them, I don't have the training as a tech support agent to say whether something should be recorded nor the method that's appropriate for your books.

 

If you do decide to record it, there are going to be a couple of things to keep in mind. For one, a mix of business and personal funds can complicate matters a bit, then there's the matter of whether the repayment took place through payroll or if the employee simply gave you the funds.

 

For a case where the employee has just given you back the money without deducting it from their pay, you could consider the following article: Pay for personal expenses from a business credit card or bank account. The article shows you both how to record the initial expense as well as how to pay it back.

 

For an instance where the money paid back was deducted via the employee's pay, you may still be able to use the method explained above for the expense transaction, but to show a deduction in payroll, it means adding a payroll item for this purpose. The step-by-step articles available for employee reimbursements here in Community typically cover the reverse situation, where you're reimbursing the employee. So I'll outline below how to add a deduction.

  1. Select the Payroll tab.
  2. Click the employee in question.
  3. Click Edit employee.
  4. Choose Add new deduction for the Does [employee] have any deductions or contributions? section.

You can continue the setup from there by choosing the options to best fit your situation. Once you click OK, there will be a field on the next pay run for the amount you indicated in the setup or there will be a blank field for you to enter the amount you'd like.

 

In the event you were previously using Advanced Payroll powered by Wagepoint, that system is shifting to be handled by Wagepoint alone, which you can learn more about here: QuickBooks Online Advanced Payroll to Wagepoint. The article also includes a link to the Wagepoint website, where you can then get in touch with support to learn how to handle this repayment from the employee if it was run through payroll.

 

If you're not sure which solution or setup best fits your situation, I'll direct you back to an accountant. You'll have the opportunity to explain the situation to the accountant, who can then let you know the best steps to take.

 

To use QuickBooks Online to connect with your accountant, check out the My Accountant tab. That tab has an email invite option to bring them onto your account as a user, which gives them the chance and tools they need to help you with your books. If you don't have an accountant, that same tab features the Find a pro to help button, which takes you to our list of QuickBooks-certified accountants near you.

 

I hope this is helpful to you and that you have a great weekend!