Last month I made $X amount of money, added that income to my QuickBooks Self-employed account, then recorded a business expense of $X amount of money as an owner's draw (what I need to live – Single-Member LLC owner), AND here's the problem:
Let's say I categorize this transaction as "Owner's draw" or "Personal withdrawal" (money you pay yourself from your self-employed business funds). In that case, QuickBooks doesn't read this transaction as a business expense OR add it to the personal income balance.
So I tried to solve this situation by recategorizing the transaction as "Contract labor" instead of "Personal withdrawal," and it worked! But I'm afraid this is not the right way to do it, so what would you do?
Hello there, manueltorrece.
QuickBooks Self-Employed offers three categories of money transfers. These are:
You can read this article for more details: Categorize money transfers in QuickBooks Self-Employed.
I would highly suggest reaching out to an accountant for further guidance on what category to use to ensure your books are updated.
Don't hesitate to let me know if you have follow-up questions. I'll be around to help.
Thanks Glinette! I don't know if it's a bug or if I just don't understand the basic concepts. The thing is that regardless of those 3 categories, QuickBooks reads these transactions as transfers and not as a business expense when you're actually paying yourself.
Thanks for replying on this thread, @505elec.
As what my colleague mentioned above, there are three categories for money transfers that QuickBooks Self-Employed offers. These are:
To get more advice on what category to utilize to make sure your books are updated, I would recommend getting in touch with an accountant.
In addition, I am adding this detailed article about Categorize money transfers in QuickBooks Self-Employed.
Let me know if you have any other questions about your QuickBooks account. Just leave it in the comment section below. I'll be always around to lend you a helping hand
I got you, @yperez3. I'll make sure able to set up and pay an owner's draw in QuickBooks Online (QBO).
An owner's draw account is an equity account used by QuickBooks Online to track withdrawals of the company's assets to pay an owner. Let's get this setup started.
Initially, you'll want to create an Owner's Equity account first in the Chart of Accounts before you can pay an Owner's draw. Afterward, you're ready to pay the owner, create a regular check-in QuickBooks, not through payroll and be sure to affect the Owners Equity account you created.
7. Then hit Save and close.
You can refer to this article for more details on managing an owner's draw in QBO: Set up and pay an owner's draw.
Please let me know in the comment section if you have any other concerns with paying the owner's draw in QuickBooks. I'll be around. Take care always!