Pay back an owner who paid for business purchases in QuickBooks Online

There are a few steps to record money paid back to the company’s owner when they've made a payment for the company. First, we'll have to create a Current Liability account to track the amount they're owed.

Create a liability account

First, you must create a Current Liability account to track the amount your business owes to the owner for incurring expenses on its behalf.

1. Select the Gear icon , select Chart of accounts, then select New account.
2. From the Account type dropdown, select Current liabilities.
3. From the Detail type dropdown, select Other current liabilities.
4. In the Account name field, type a relevant name such as 'Payable to owner'.
5. Select Save.

Record the business expense

Next, record the purchase the owner made and apply it to the new liability account.

1. Select + New or + Create.
2. Select Expense.
3. Select the Payee.
4. From the Category dropdown, select the category aligned to what the owner purchased for the business.
5. In the Amount field, enter the amount paid.
6. On a new line, from the Category dropdown, select the account Payable to owner.
7. In the Amount field, enter the total purchase amount as a negative figure.
   Note: When done correctly, the amount at the top right should read $0, as no cash has left the business at this point.
8. If Tax is turned on, it is mandatory to enter a value in the Tax field.
9. Select Save and close.

Reimburse the owner

Finally, record the transfer of funds from the business bank account to the owner.

1. Select + New or + Create.
2. Select Transfer.
3. From the Transfer Funds From dropdown, select the name of the bank account used to pay the owner.
4. From the Transfer Funds To dropdown, select the account Payable to owner.
5. From the Currency dropdown (available only if multi-currency is turned on), if required, change the currency in which it was paid.
6. In the Transfer Amount field, enter the amount reimbursed.
7. Select Save and close.