Record a business expense paid with personal cad

anamenino · ‎June 27, 2021

Hi everyone,

At the beginning of our business, we had a few expenses which we paid with my personal debit card. I do not want to get this reimbursed, as I see them as initial investment, but I would like to record them properly.

I have seen several suggestions. One being, to record the expense as an expense (eg. +10£ at Amazon) and at the same time add the same value to the owner's investment/equity account (-10£ at Owner's Equity). While this seems to work, I have noticed when I create a report or check the supplies list, the amount spent on Amazon does not reflect this value. Something else that is also strange, is the fact that I need to register that expense into a payment account. would it not make sense that you could just select the owner's equity?

Has anyone found a better way to deal with this issue? Or is there something else I am missing?

Many thanks in advance, Ana

Certified gold trainer · ‎August 18, 2021

Hi Ana

The easiest way to achieve what you want is to set up a Directors current account as a bank account, ( a virtual bank account - but called a bank account within quickbooks) then pay the expenses out of that. This will always be overdrawn on Quickbooks as it will represent the money that the company owes you.

I hope this helps

Martyn A Smith A.F.A, M.I.P.A

Institute of Financial Accountants

www.themobileaccountant.co.uk

Certified Gold Quickbooks Trainer and Accountant

www.quickbookstraininguk.co.uk

View solution in original post

Certified gold trainer · ‎August 18, 2021

Hi Ana

The easiest way to achieve what you want is to set up a Directors current account as a bank account, ( a virtual bank account - but called a bank account within quickbooks) then pay the expenses out of that. This will always be overdrawn on Quickbooks as it will represent the money that the company owes you.

I hope this helps

Martyn A Smith A.F.A, M.I.P.A

Institute of Financial Accountants

www.themobileaccountant.co.uk

Certified Gold Quickbooks Trainer and Accountant

www.quickbookstraininguk.co.uk

Intrepid_Learner

May I ask why set it up as a bank account and not an equity account?

Others here have suggested to set up a Directors Loan account as an equity account.

So what is the difference between:

Directors Current Account as a 'Bank Account'

Directors Current Account as a 'Current Liabilities' account type

Directors Loan Account as a 'Equity Account'

Thank you.

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Record a business expense paid with personal cad