hi, i have a small business (an llc but i am the sole proprietor and i file a 1040 schedule c for the business)…
i’m switching to quickbooks from another program (multiledger) and i used to have and use a separate multiledger “company” set up just for balancing my personal checking account, but i’m wondering if i can and should now meld the personal bookeeping into my qb business ledger?…
i use the personal checking account to:
- pay for personal things, of course
- pay for personal percentages of business expenses since i work from home, so for example: i pay 50% of my utlility bills from my personal checking account (and 50% from my business checking account)
- i sometimes transfer money from my business checking account to my personal checking account for personal expenses reimbursement, and also to pay myself for owner’s draw
so my questions:
- can i set up a chart of account in my business qb ledger and use it for my personal checking account, but somehow have it not affect my business profit and loss statements etc?…
- can i (should i?) then set up chart of accounts for expenses, like “utilites – personal” where my personal checking account assigns payments to those accounts? can i set things up so i can keep those payments separate for my business reports?
- if the above is possible, are there any reasons why i shouldn’t do it? (a reason why i’d like to do it is so that i don’t have to always open up and work in 2 different qb ledger “companies”)
thank you for your help and forgive me for my lack of knowledge when it comes to principles of accounting!
I'm here to share details about handling your business and personal accounts in QuickBooks Desktop (QBDT) for Mac, @toddlerner. This way, you'll be able to determine the action you need to take care of this.
Here in QuickBooks, we always recommend not to mix your personal and business expenditures. This is to help you make good business and personal financial decisions. It isn't necessary to start an additional company in QBDT for Mac since there's a proper way of recording your expenses without combining your business and personal accounts. An example of this is to send yourself a bill or invoice, then pay and receive its payment to complete the process.
You can check out this article for further details: Pay for business expenses with personal funds. This link is for QuickBooks Online (QBO). However, the information can be a reference for QBDT for Mac as well.
Additionally, I'd recommend consulting your accountant to ensure your books are accurate. They can also further guide you on what other options that's best in handling your personal and business expenses.
To learn more about mixing personal and business finances in QuickBooks, I'm adding this article for further details: Why it’s best to keep your QuickBooks file all business. It also includes popular articles and video tutorials in effectively managing your business with QuickBooks.
Please let me know if you have other concerns. I'm just round to help. Take care always.