My son has started a plumbing business and I am a partner.
I have paid for everything from my personal account including a vehicle, Invoices are made out to the company.
How do I record these entries and can the company claim the VAT on these invoices if I have paid for them? We are VAT registered.
Congrats on your business, @Giovanna7101.
I'd be happy to walk you through how you can record your business transactions in QuickBooks Online.
Let's start with creating an equity account to handle your business expenses. This account is usually used for the business owner or partner to track money that you invest or draw from the business.
To do that:
For more details about this process, you can always check out this link: Add an owner or partner to your books.
After that, you'll need to make a deposit to the account that you made. This deposit will be used on your expense transactions afterward.
To give you more details about recording your investment, feel free to visit this article: Learn how to record capital investments to track money going into your business.
Once done, it's time to record your expenses:
However, to help verify the VAT code that you will be using and to verify if you are eligible for VAT claims, I recommend reaching out to your accountant. This way, you'll be guided on what are the best way to handle this situation.
You can also consult our accountants through this site: Find an expert.
Once verified, you may utilize this link attached to guide you in setting up and tracking VAT codes in the system: Set up and edit VAT settings, VAT codes, and VAT rates.
Get back to us here if you have other questions about this or with QBO. I'm always here to help.
I have had a look at the information you have sent me and thank you.
step 2 you said I have to make a deposit? I have already paid for all these expenses out of my own personal bank account. So would I put the transactions into Quickbooks as expenses and assets then do a journal into owners equity?
So you would need to have set up a liability account for the loan in the chart of accounts section and once you have done that you then would create a deposit from the + new section>deposit and put it into that liability account. When the Company pays it back or some of it back, you will need to create an expense from the +new> expense and expense it from the liability account.
In regards to the vehicle you would have to set up an tangable asset account from the chart of account section to account for it in Quickbooks.