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Level 1

Posting expenses

When we receive an invoice from a supplier for inventory, we pay using the owners personal credit card and then we pay the credit card from the company bank account.  What would be the transactions 

2 Comments
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QuickBooks Team

Posting expenses

Hello nuagefish,

 

Thanks for taking a moment to explain a bit of what's going on with the supplier invoice and how it was paid. I see how this sort of situation can be tricky to navigate since it mixes personal and business funds. It's important to make sure this is recorded clearly so that you don't run into trouble once it comes to filing taxes, and I'm here to help with recording this in QuickBooks Online.

 

At QuickBooks, we know this kind of mixing of funds can happen from time to time. For that reason, we've included a set of articles about this in the community help articles, including one called Pay for business expenses with personal funds. This article shows you an option to record the transaction as well as how to pay back the personal funds.

 

Since the bill you're receiving is for inventory from the supplier, that does complicate matters a bit since the process outlined in the article uses a journal entry to show the purchase using personal funds. In light of that, it wouldn't touch inventory count. Here's an article with more information about inventory in QuickBooks Online: Set up and track your inventory in QuickBooks Online

 

I recommend checking in with an accountant to determine the best way to approach this situation. You both may even be able to use the article I linked as a starting point.

 

You can use the My Accountant tab in your QuickBooks Online account to connect with an accountant you're already working with or find someone near you who can help. The tab has a field to invite an accountant to your account as a user, which would give them the tools they need to help you manage your books. The Find a pro to help button is great as it gives you the opportunity to research our list of QuickBooks-certified professionals in your area.

 

I hope that helps!

Highlighted
Level 6

Posting expenses

hi nuagefish

 

Generally you'll want to maintain better separation between personal and business funds; getting a business only credit card is highly recommended so you can be sure all business purchases are made on the business card, letting you link it with the automatic Quickbooks feed, as well as ensure any interest, fees, or other charges related to the card can be expensed through the business.  But, to answer your question:

 

Purchase:

Debit - inventory

Credit - either:

a) create a special 'accounts payable' account representing the money owed to the owner, or;

b) post the credit to 'owner's equity' establishing that the business owes money to the owner

 

Payment:

Credit - cash/bank account

Debit - whichever 'we owe the boss money' account used above

 

Hope this helps!