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CCCBuilder
Level 1

Entering transaction for ITEMS paid with a personal rebate?

I paid for some business tools using a personal rebate I had for a big box store.  Technically the rebate could be considered cash, right?  What process should be taken to record the transaction for the tools so that I can enter them as ITEMS: Tools bought for the business from my own personal funds, since the rebate was not first a transfer to the business equity?  Should I show cash from my Member Contributions to LLC Cash 'Checking Account', and then "Write a check" from the LLC Cash 'Checking Account'?  I'm upset that with such a reputable product, and on Desktop 2020 Pro, that there is still no easy solution for Cash tracking besides making a fake checking account.  Either way, my goal here is to show the paper trail with as little extra hoops as possible - is this the best way then?

4 Comments
Rustler
Level 15

Entering transaction for ITEMS paid with a personal rebate?

There are several ways to do paying business transactions with personal money, I prefer

 

bring up a bill, on the item tab select the items you bought, qty and price to include sales tax if any

then on the expense tab, select owner equity investment and enter the total amount as a negative number

save the zero dollar transaction

 

That said, tools are usually just an expense (unless you are in the business of selling them), with the exception of high dollar long life tools.  Like a lathe, large air compressor, etc

 

CCCBuilder
Level 1

Entering transaction for ITEMS paid with a personal rebate?

Rustler, thanks for that reply. So I actually am trying to use Items for everything to make tracking stuff easier.  It may be a bad idea - but in this scenario... I have an ITEM titled 'Tools & Equipment' for exactly that, basically any tool that isn't disposable. Anything from a nailgun to a tape measure, though those are arguably becoming a disposable item.

 

Anyways, if I go to Enter a Bill, choose the Vendor I bought the tools from using my personal rebate, if I go and do like you say (enter expense account as my equity account with a negative number of the total cost of the tools) and then enter the tools as the ITEM they are categorized under...I end up with a $0 bill. When I hit save it also says PAID right away which is great.

 

Should I not be using an Item to track tool expenses? I have the Tools & Equipment Item linked to an expense account of LLC Costs: Tools & Equipment.  This way when I buy tools in the midst of materials, I can easily enter the tool in the same transaction just because I chose the Tool category under my items tab.  In this case it worked great, but if I omit the tools Item, would I just run the 'Bill' with the negative expense to my equity account and a positive value expense to the Tools & Equipment account? Or would that throw things off in reporting? Looking for ways to just clean up extra work or save time.

 

 

Jen_D
Moderator

Entering transaction for ITEMS paid with a personal rebate?

Glad to have you back, @CCCBuilder,

 

Rustler's advice is a great technique to record an investment, at the same time showing what was actually bought.

 

Using an Expense category to account a purchase for Tools and Equipment posts the amount directly to the Profit and Loss report.

 

You only want to utilize items on bills if you want to sell or track them in the Product and Services list. They way you do this really depends on your business perspective.

 

Let me know if you have any questions or clarifications by adding another comment below. I'll be glad to share and provide further guidance on how to record purchases using personal funds. Have a wonderful day!

Rustler
Level 15

Entering transaction for ITEMS paid with a personal rebate?


@CCCBuilder wrote:

Should I not be using an Item to track tool expenses? I have the Tools & Equipment Item linked to an expense account of LLC Costs: Tools & Equipment.  This way when I buy tools in the midst of materials, I can easily enter the tool in the same transaction just because I chose the Tool category under my items tab.  In this case it worked great, but if I omit the tools Item, would I just run the 'Bill' with the negative expense to my equity account and a positive value expense to the Tools & Equipment account? Or would that throw things off in reporting? Looking for ways to just clean up extra work or save time.

 

 


Using a generic item like that is fine.  That allows you to report on purchases easier too.

 

And it makes no difference if you use that item on a bill and pay it later, or on a transaction.

 

I have no idea what intuit means by this

You only want to utilize items on bills if you want to sell or track them in the Product and Services list.

 

Items MUST be on the product & services to exist, so of course you use them on a bill to purchase them.

 

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