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With QuickBooks, you can set up owners and/or partners to track what they contribute to your business. Owners typically own stock in the company, whereas partners will contribute money and other assets without sharing in your profits and losses. For more information on partners and owners, you can review the Internal Revenue Service's website.
QuickBooks uses vendors as a way to track what you, partners, or co-owners contribute to your business. If you, an owner, or partner, wants to make a contribution, you'll need to set up a vendor for every person.
Here's how:
- In the left navigation bar, go to Expenses, then Vendors.
- Click New vendor.
- Enter any necessary information.
- Select Save.
Next, you'll need to set up an equity account to track their investment(s):
- Use your Gear icon, then go to Chart of accounts.
- Click New.
- From the Account Type ▼ drop-down list, choose Equity.
- For your Detail Type ▼ drop-down, pick Owner's Equity or Partner's Equity, depending on the situation.
- Select Save and Close.
If you're the business's sole owner, you'll only need to set up one equity account. Before setting up accounts for more than one partner or owner, review the steps in our Add an owner or partner to your books article.
Now you'll be ready to Record an owner's contribution or capital investment in your books. In the event you aren't sure which account to use, amount to enter, etc., you'll want to work with an accounting professional. If you're in need of one, there's an awesome tool on our website called Find a ProAdvisor. All ProAdvisors listed there are QuickBooks-certified and able to provide helpful insights for driving your business's success.
I've also included a detailed resource about working with owner's equity which may come in handy moving forward: What is owner's equity & how to calculate it?
I'll be here to help if there's any additional questions. Have a lovely Thursday!
