Partnership Guaranteed Payments

It's nice to have you here in the QuickBooks Community, ntesllc. I'll share information about recording partnership-guaranteed payments in QuickBooks.

Automating partner payments is not possible when establishing direct deposit payroll. As a result, you must create a manual check for your partners and deposit it into an expense account.

You can go to your Chart of Accounts and add the new expense categories from there. Below are the steps to complete the process:

1. Sign in to your QuickBooks Online (QBO) account.
2. Click Accounting in the left panel and choose Chart of Accounts.
3. Select New.
4. Choose a Category/Account type (Expenses or Other Expenses) and name it as Guaranteed Payments.
5. Fill in the needed details and hit Save & Close once done.

Then, you can create a check. Here's how:

1. Go to + New, then select Check.
2. From the Payee ▼ dropdown, select who you want to address the check to.
3. From the Bank Account ▼ ( choose Guaranteed Payments )
4. Fill out the rest of the fields accordingly.
5. Select Save and Close.

For more details, see this article: Create and record checks in QuickBooks Online.

However, if you want to pay your partner using direct deposit, you can set them up as a contractor. This way, the payment method you'll be using is direct deposit. For more details, see this link: Pay a contractor with direct deposit.

Upon sharing the steps above, I'd still suggest consulting your accountant. They can provide expert advice on how to set up the deduction for your partner to ensure your books will be accurate.

If you'd like to record capital investments to track money going into your business, you may open this article: Record an owner's contribution or capital investment in your business.

If you need assistance with partnership-guaranteed payments or anything else, please visit us again anytime. We are always here to help you.

Hi, I am using quicbook online and am having trouble trying to set a Guranteed Payments acount. I followed your instructuions but got stuck on one part. Once I add in Expenses as the account name what would I add in the detail type column that corrdinates to this? Woudln't the steps be as follows below? 

Account type: Equity 

Detail Type: Partners Equity 

Name: (Guranteed Payments)

Description:  _______ (?)

Any help would be must appeciated, thank you in advance. 

The guaranteed payments account should be set up as an expense account, not an equity account.

This is an older article (from 2023).  Is it still not possible to pay partners guaranteed payments automatically via direct deposit along with the W2 employees? 

I appreciate you joining this thread, jkm2.

At this time, QuickBooks Online Payroll doesn't support automatic direct deposit for guaranteed partner payments alongside W-2 employees. The direct deposit functionality in QuickBooks Online Payroll is specifically designed for processing employee wages and contractor payments.

In case you set your partner as a vendor, you can use QuickBooks Bill Pay to pay them using ACH. For detailed information about QuickBooks Bill Pay and how it works, you can explore this link: Learn about QuickBooks Bill Pay.

Also, you can use a third-party payment processor that integrates with QuickBooks Online to facilitate partner payments. To explore available integrations, go to the Apps menu in QuickBooks Online or follow this direct link: QuickBooks Apps.

If you have additional questions or need further assistance, feel free to leave a comment below. I’m more than happy to help.