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How to pay back to the owner who paid for purchases on behalf of business

by Intuit Updated 2 days ago

There are a few steps to record the pay back to the company’s owner who did some payment on behalf of the company. First, we'll have to create a Current Liability account to track the amount owing to the business owner for incurring expenses on its behalf.

Step 1:

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

Step 2:

  1. Select + New. Select Expense.
  2. Select the Payee.
  3. From the Category dropdown, select the account Payable to owner.
  4. 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 S $0, as no cash has left the business at this point.
  5. Select Save and close.

Step 3:

  1. Select + New. Select Transfer.
  2. From the Transfer Funds From dropdown, select the name of the bank account used to pay the owner.
  3. From the Transfer Funds To dropdown, select the account Payable to owner.
  4. From the Currency dropdown, if required, change the currency in which it was paid.
  5. In the Transfer Amount field, enter the amount reimbursed.
  6. Select Save and close.
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