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mikidzmimi24
Level 2

Business & personal accounts under one company

I'm wondering about the pitfalls of tracking my personal expenses through my Quickbooks Online that I track my company through. 

Any thoughts?

Solved
Best answer January 20, 2021

Best Answers
john-pero
Community Champion

Business & personal accounts under one company

You should avoid mixing personal and business, although it is common practice. Not every business starting out can establish pure business banking and credit so many times it is unavoidable. There are times even when expenses are shared or split between business and personal, such as a home office and allocating a percentage of utilities and taxes as a quick example.

 

If you are an S corp, avoid it at all costs, if a multi member LLC also avoid

 

If you are a single member LLC or a Sole Proprietorship here is what you need to do to keep track separately of personal and business.

 

Set up your equity accounts for Equity, Draw, and Contribution. Make all three of these sub accounts of a master Equity account that you never post to and acts as a summing account of the other three. Record all personal money put into the business as a Contribution, post all money taken out as Draw, and this INCLUDES any time the business pays for a personal item, not only when you write yourself a check.

 

Keeping all the above in mind, Intuit does offer a FREE personal finance program called Mint that is a better place to keep track of your personal life

View solution in original post

1 Comment
john-pero
Community Champion

Business & personal accounts under one company

You should avoid mixing personal and business, although it is common practice. Not every business starting out can establish pure business banking and credit so many times it is unavoidable. There are times even when expenses are shared or split between business and personal, such as a home office and allocating a percentage of utilities and taxes as a quick example.

 

If you are an S corp, avoid it at all costs, if a multi member LLC also avoid

 

If you are a single member LLC or a Sole Proprietorship here is what you need to do to keep track separately of personal and business.

 

Set up your equity accounts for Equity, Draw, and Contribution. Make all three of these sub accounts of a master Equity account that you never post to and acts as a summing account of the other three. Record all personal money put into the business as a Contribution, post all money taken out as Draw, and this INCLUDES any time the business pays for a personal item, not only when you write yourself a check.

 

Keeping all the above in mind, Intuit does offer a FREE personal finance program called Mint that is a better place to keep track of your personal life

View solution in original post

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