LLC Owner Paid Expenses from Personal Account - Lump Sum Reimbursement

mpierce486 · ‎November 01, 2020

Hello!

I created a new LLC and am the sole owner/member. I had several expenses up-front which I paid using my personal checking account before the business account was up-and-running (and before I had a business AMEX). Now, I would like to "reimburse" myself and make all those purchases just be an "owner's investment" instead of actually sending cash back to myself from the business account.

Can I do one lump-sum transaction instead of separate "reimbursement" transactions for each one? If so, how is the best way to do this?

Thank you!

katherinejoyceO · ‎November 01, 2020

Welcome to the Community, @mpierce486. I'm here to guide you on creating a journal entry to record business expenses you made with personal funds.

First off, let's record the business expense you paid for with personal funds. Here's how:

Go to the + New menu, then select Journal Entry.
On the first line, choose the expense account for the purchase.
Enter the purchase amount in the Debits column, then choose Partner's equity or Owner's equity on the second line.
Enter the same purchase amount in the Credits column.
Click Save and close.

Then, reimburse the money to your personal account by either creating a check or an expense. Here's how:

Go back to the + New menu, then select Check or Expense.
Choose a bank account to use to reimburse the personal funds.
Select the Partner's equity or Owner's equity from the Category section.
Enter the amount and the necessary details.
Click Save and close.

You'll also want to check out this article for more details: Pay for business expenses with personal funds.

For future reference, read through this article: Transfer funds between accounts. It helps you learn about how to use the Transfer feature to record funds transfer transactions in QuickBooks Online.

Visit us again here in the Community if you have additional questions, @mpierce486. I'd be delighted to answer your next post.

View solution in original post

katherinejoyceO · ‎November 01, 2020

Welcome to the Community, @mpierce486. I'm here to guide you on creating a journal entry to record business expenses you made with personal funds.

First off, let's record the business expense you paid for with personal funds. Here's how:

Go to the + New menu, then select Journal Entry.
On the first line, choose the expense account for the purchase.
Enter the purchase amount in the Debits column, then choose Partner's equity or Owner's equity on the second line.
Enter the same purchase amount in the Credits column.
Click Save and close.

Then, reimburse the money to your personal account by either creating a check or an expense. Here's how:

Go back to the + New menu, then select Check or Expense.
Choose a bank account to use to reimburse the personal funds.
Select the Partner's equity or Owner's equity from the Category section.
Enter the amount and the necessary details.
Click Save and close.

You'll also want to check out this article for more details: Pay for business expenses with personal funds.

For future reference, read through this article: Transfer funds between accounts. It helps you learn about how to use the Transfer feature to record funds transfer transactions in QuickBooks Online.

Visit us again here in the Community if you have additional questions, @mpierce486. I'd be delighted to answer your next post.

Nikki3006

Hi,

On the credit column it is requiring it to be tied to an account as well. Do we put the same vendor etc. or do we assign it to something else for these personal expenses? Any help would be greatly appreciated. Thanks

Nikki3006

I figured out that part there was something missing that I didn't see. But on another note, I saved like your directions said and did the second part but do not see it on the check register and now my balance is not reflecting correctly.

ShyMae

I appreciate all the things you've done, Nikki. When creating a journal entry in QuickBooks Online to record business expenses made using personal funds, select a vendor for the expense account to keep accurate records.

On the second line, you can skip selecting a vendor. You can check out this article for more information: Pay for business expenses with personal funds.

After creating the journal entry, remember to select the same vendor when creating an expense or check. Also, choose a bank account to reimburse personal funds. This process will help maintain accurate records of your transactions.

Once you complete these steps, the transaction will be visible on your Bank Register page. Ensure to choose the correct bank account so the transaction is accurately reflected.

For future reference, check out these articles to help you track your business expenses:

That should help clear up any confusion regarding journal entries for recording business expenses paid with personal funds. Feel free to reach out if you need further assistance with entering transactions. Take care, Nikki3006!

Nikki3006

Thank you so much for getting back to me. I made one big JE for each of the transactions we had made out of my personal account. Each expense had a debit/credit with the vendor name on it. Should I have done it a different way? I also created a check to myself for Member Draw in the same amount memo JE#10 and the reason. I only see the check on the checking register not the JE's that would intentionally balance everything out. I am concerned I did something wrong due to the fact that my ending balance changed drastically. Any suggestions or changes I need to make? Thanks

Deity Alpha

@Nikki3006

Consider having a free billing management app to sync with QBO. You are allowed to reimburse your business expenses from your business bank account to your personal account. You can pay by ACH for free and receive the payment by ACH for free also. You don't need to bother registering it manually.

MirriamM

Hello there, Nikki3006.

Let me join the thread and provide information about your concern when creating a Journal entry.

When creating a journal entry in QuickBooks Online, it's important to ensure that the accounts used in the entry are correct. If the journal entry does not appear in your checking register, I recommend reviewing the accounts used in the journal entry, as only those specific accounts will be displayed on the register.

To ensure the journal entry appears on your checking register, make sure to include the checking account in the entry. Additionally, you can consider contacting your accountant. They can provide more information on recording this transaction.

For future reference, here's an article you can check for the best practices when reconciling your account: Reconcile an account in QuickBooks Online. It also offers guidance on addressing challenges during the reconciliation process.

Should you have any other concerns, don't hesitate to leave a comment below or start a new thread. We're always here to lend a hand, Nikki3006.

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LLC Owner Paid Expenses from Personal Account - Lump Sum Reimbursement