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Recording transactions without a bank account

I am a new business owner. I have 2 months of transactions prior to establishing business banking. I would like to record those transactions in quickbooks for tax purposes but I do not want to link them to any bank account.  

For example, while in training, I did not charge customers for nutrition visits but they did pay for their whole food supplements. I deposited income for the purchase in my personal checking. Also, I purchased wholesale supplements using my personal checking.   I do not want to add my personal checking account to my quicken business. However, I do need to record the transactions for record keeping purposes.  

I need to record income to me and vendor purchases to others...without linking a bank account. 

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Best answer 12-10-2018

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Established Community Backer ***

"I would like to record those transactions in quickbooks...

"I would like to record those transactions in quickbooks for tax purposes but I do not want to link them to any bank account."

And yet, they obviously are Paid, somehow, using Funds, from somewhere.

"For example, while in training, I did not charge customers for nutrition visits but they did pay for their whole food supplements. I deposited income for the purchase in my personal checking."

Then I recommend setting up one Bank account and name it Owner Funds or Cash On Hand.

"Also, I purchased wholesale supplements using my personal checking."

Checking, credit card, or cash; all you need is one Bank account to represent Owner Paid and Owner Kept revenue from sales.

"I do not want to add my personal checking account to my quicken business."

You never link a personal bank for business purposes, and you don't need to Link an account at all, even if it is a real bank account.

"However, I do need to record the transactions for record keeping purposes."

You did not mention the business Entity Type; if this is a corporation, then instead of Bank Type, use Credit Card Type, as "liability" and name it Owed to Shareholder. Now use the data input tools for "credit card Charges" to show you made these purchases on behalf of the business, and this creates the running balance to repay you.

In either case, you need to process Sales, and then "deposit" either to Owner Bank, or against Credit Card account Balance.

"I need to record income to me and vendor purchases to others...without linking a bank account."

You don't need to link anything, ever. That is Optional.


9 Comments
Established Community Backer ***

"I would like to record those transactions in quickbooks...

"I would like to record those transactions in quickbooks for tax purposes but I do not want to link them to any bank account."

And yet, they obviously are Paid, somehow, using Funds, from somewhere.

"For example, while in training, I did not charge customers for nutrition visits but they did pay for their whole food supplements. I deposited income for the purchase in my personal checking."

Then I recommend setting up one Bank account and name it Owner Funds or Cash On Hand.

"Also, I purchased wholesale supplements using my personal checking."

Checking, credit card, or cash; all you need is one Bank account to represent Owner Paid and Owner Kept revenue from sales.

"I do not want to add my personal checking account to my quicken business."

You never link a personal bank for business purposes, and you don't need to Link an account at all, even if it is a real bank account.

"However, I do need to record the transactions for record keeping purposes."

You did not mention the business Entity Type; if this is a corporation, then instead of Bank Type, use Credit Card Type, as "liability" and name it Owed to Shareholder. Now use the data input tools for "credit card Charges" to show you made these purchases on behalf of the business, and this creates the running balance to repay you.

In either case, you need to process Sales, and then "deposit" either to Owner Bank, or against Credit Card account Balance.

"I need to record income to me and vendor purchases to others...without linking a bank account."

You don't need to link anything, ever. That is Optional.


Not applicable

Re: "I would like to record those transactions in quickbooks...

What do you choose in payment account drop down menu to record an expense when your bank account is not linked?

QuickBooks Team

Re: "I would like to record those transactions in quickbooks...

Hi there, RN5786.

 

Thanks for joining the thread. I'm here to provide some insight regarding the payment account.

 

You'll need to set up one Bank account in QuickBooks so you'll have an option to select when recording expenses. Rest assured, as qbteachmt mentioned, you don't necessarily need to link the Bank Feeds to QuickBooks. The steps below will guide you through the steps on how to set this up:

  1. From the Lists menu, choose Chart of Accounts.
  2. Click the Account drop-down button, then select New.
  3. Choose Bank and click Continue.
  4. Name the account.
  5. Click the Opening Balance button.
  6. Enter the Statement Ending Balance and Statement Ending Date.
  7. Click Save & Close.

That should do it. Once you've created the account, you'll be able to record the expense with the right payment account in no time.

 

Let me know if there's anything else I can help you with. I've got your back. Thanks again for dropping by, wishing you and your business all the best.

Frequent Explorer *

Re: "I would like to record those transactions in quickbooks...

I have the same question and this seems to be an easy solution. 

So I would open a Bank account with opening balance $0, and statement ending balance $0?

Not a real bank account, just one to facilitate these expenses?

Frequent Explorer *

Re: "I would like to record those transactions in quickbooks...

I have the same question and this seems to be an easy solution. 

So, I would create a bank account with $0 balance and $0 Ending Statement Balance? 

Not a real bank account just one to facilitate  entering these expenses? 

Moderator

Re: "I would like to record those transactions in quickbooks...

Thanks for joining this thread, PATMCNEANY.

 

I'm here to help you set up a bank account in QuickBooks Desktop.

 

You have the option to enter a zero balance for the sample bank account. However, once you enter and pay the expenses using this account, it will create a negative ending balance.

 

If you want to avoid this, you'll want to enter a positive value of the opening balance when setting up the bank account. 

 

Here are some articles about the workflows in QuickBooks:

That should answer your concern. If you have follow-up questions about QuickBooks, please let me know. I'm always happy to help. Have a good day!

Not applicable

Re: "I would like to record those transactions in quickbooks...

Then once you have these expenses paid, what do you do with the remaining funds in the bank account so that you can close the dummy account, and how do you show the IRS that it was just a dummy account for startup expenses?

Moderator

Re: "I would like to record those transactions in quickbooks...

Hi there, southernbelle84.

 

All your personal transactions should not reflect in Quickbooks.

 

You only have to deposit the returned amount that you've used in your business from the personal account. You may want to delete those transactions to get a zero balance.

 

Alternatively, you can create a journal entry to record the expenses you paid against your equity account. You'll use an equity account because it's your personal funds.

 

When you reimburse yourself, you can create an expense or a check transaction. The source of funds will be your business account and you can enter your equity account in the Expenses table. This will replenish your equity account.

 

For presenting the dummy account to IRS, I recommend reaching out to your accountant. 

 

Thanks for dropping by, let us know if you need anything else. 

Not applicable

Re: "I would like to record those transactions in quickbooks...

Thank you!! That answered my question. What if...however...let's say a friend loaned money to the company, paid back to him within 1 year. What I have done is made a GE as follows... Debit other Other Current Assets (account "Loan from Mike") and Credit other current liabilities (account " Due to Mike") instead of an equity account. Does this make sense? and is it an ok way to report this? Then, how do I record payments for materials, supplies, and other business expenses out of these loan proceeds, and how do I show payments back to Mike?

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