How can I record owners contributions and distributions in quickbook online?

distributions are associated with an s-corp election - is the company taxed as an s-corp?

For a company taxed as a sole proprietor (schedule C) or partnership (form 1065), I recommend you have the following for owner/partner equity accounts  (one set for each partner if a partnership)

[name] Equity (do not post to this account it is a summing account)
>> Equity
>> Equity Drawing - you record value you take from the business here
>> Equity Investment - record value you put into the business here

What you do you mean by summing account?

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@lewisexpress wrote:

What you do you mean by summing account?

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A summing account is a parent account that is not posted to but contains child or sub accounts that are posted to. The total current value of each child account will be reflected in the total of the parent/summing account.  

If there are not multiple shareholders, create a single Equity account (eg: Owner Capital) and credit/debit as needed ;)

if there are multiple shareholders could we just create 1 account each and debit/credit that account? or creat a parent account and do it that way?

In Quickbooks, are distribtuitions the same as draws for a Partnership?

I'm used to hearing the term "distributions" when profits are distributed to the partners, but I only see Equity and Draws. I would think that Draws are a partner removing funds from their capital account and thereby decreasing their share of the partnership whereas a distribution doesn't decrease the partners equity.

Thanks for joining this thread, Pro2017_User. Let me provide some information about Distribution and Draw in QuickBooks.

Partner distribution means you are moving last year's retained earnings to each partner's equity account. On the other hand, Owner Draw is an equity-type account used when you take funds and put money in the business. 

Owner's equity is the personal cash or assets an owner has directly invested in their business. There are many ways to account for owner's equity. It mostly depends on how you set up your business (sole proprietor, partnership, LLC, S-corp, or C-Corp). You can also check this link to learn more about different types of owner's equity.

If you wish to have a distribution account in your Chart of Accounts, you can set up one. I suggest also consulting an accountant for further guidance on what account and detail types to use. This is to ensure that your books are accurate.

In addition, let me attach this article to help you determine accounting terms in QuickBooks: Learn common QuickBooks terms.

Feel at ease to comment down below if you have other questions about distribution and draws in QuickBooks. I'll be around to help again. Keep safe always.

Follow up question -

We recently started paying owner distributions. We have 1 parent company with 3 subs. Two of the three subs sent the parent company a distribution as it is part owner. How would the receipt of the distribution be booked at the parent? I booked the distribution paid at the sub level to the respective equity account. However I don't feel that the receipt should go to equity. I also don't think that dividend income is appropriate. Is there another account maybe I'm missing?

question where do i even report or set up owners draw 

Good day, @lblackman38.

An owner's draw is a draw method used when a sole proprietor or partner in a partnership takes company money for personal use. In order to track this on QuickBooks, you have to create an equity account. That way, the program can trace the withdrawals of the company's assets when paying yourself. Here's how:

1. Click the Gear icon at the top, and select Chart of Accounts.
2. In the Chart of Accounts window, click New.
3. From the Account Type drop-down list, choose Equity.
4. Choose Owner’s Equity from the Detail Type drop-down list. 
5. Enter an opening balance.
6. Click Save and Close.

Once done, you can create a check and use the owner's equity account to record the payment.
 

1. Click + New and select Check.
2. Choose the bank account where your money will be withdrawn.
3. Select Print later if you want to print the check.
4. Fill in the check fields. In the Account field, be sure to select the Owner's equity account you created. 
5. Click Save and Close. 

For the detailed steps, you can check out this article: Set up and pay an owner's draw.

All of the transactions you've created using this account will be posted in your account's register. If you need to review your data, simply run an Account Quick Report. Just go to the Accounting menu and select Chart of Accounts. Then, look for the Owner's equity account and click the drop-down list under the ACTION column. Finally, choose Run report to check your account. 

And if you want more details, you can customize reports to focus on specific accounts or filter for specific things.

In case you have further questions or concerns, please click the Reply button and write them down. I'll be here if you need further assistance. Have a good one!

The money we invested in the business during start-up is a positive capital account;  until the account is completely depleted, we aren’t actually taking draws from the business.  We are getting a “return of capital” or the business is seeing a “reduction of capital.”  HOW DO I CATEGORIZE THIS IN QUICKBOOKS?

Hello,

So in the case of partners who all contributed startup funds, do you create separate Equity accounts for each partner? What is the best way to do this?

Hi there, dnoggles.

Yes, you can create separate equity accounts for each partner. However, I'd still recommend reaching out to your accountant so you'll be guided further on the best way to record it without messing up your account.

I've also added this reference for more information about setting up the equity account: Set up Equity Accounts.

I'll be around whenever you need help. Stay safe!

In my situation, i have get owner's distributions negative which is confusing for me i want to clear that is it possible to have negative balance for owner's distribution in quick books? 

My business is taxed as an s-corp. Would these steps be any different? 

One of my clients used the business checking account for the purchase of a refrigerator. I posted this as an owners draw. He ended up canceling the purchase due to delivery issues. I posted the cancelation (or return) of the refrigerator as an owner contribution. Is this correct? I consider that contributions and distributions net the same regardless of which account the transaction is posted.