We have 2 QuickBooks files set up for my employer, one business and one personal. (I know that it would be better to set up the personal file using Quicken, but that is not possible right now.) My boss has paid for business expenses using a personal credit card from the personal file, and he can now reimburse those expenses from the petty cash account in his business file. However, these would be cash payments and would not go back into the credit card account. How should I enter these transactions into the business account so they can be written off at tax time, and how I should enter the reimbursement into the personal file?
Thanks for providing detailed information, SwedishChick.
I'll ensure you'll be able to record all of these transactions both on the business and personal file.
In the business company file, you can create a check and use the petty cash account to reimburse the business expense paid by the personal credit card. I'll show you how.
After that, you can also create a check to record the business expenses in the personal company file. You can either use the Expenses tab or the Item tab. Then, initiate a transfer to reimburse the personal account.
I also recommend consulting with your accountant since they might have other ways to record the reimbursement paid by personal credit card.
In addition, we also suggest reconciling your account at least once a month to ensure your QuickBooks balance matches your bank and credit card statement. Check out this article for more details: Reconcile an account in QuickBooks Desktop.
Let me know if you need further assistance with recording transactions. I'm always here to help you.
Thank you very much for your response! I got the first part squared away, but I'm afraid I need more detailed instructions on how to create a dummy account. Also, can the money be transferred as a lump sum, or do I need to create a transaction for each entry. In addition, when the charges were originally charged to the credit card in the personal file, I created an entry for each item, and in the "Account" box under "Expenses" I entered the account that corresponded to the account I would have used if I had entered it in the company file, such as "fuel expense" or "office supplies", etc. Should I not have done that? Perhaps I should have made up some other category such as "loan to [company name] or something similar? I really appreciate the help you have given me so far, and I would be very grateful if you could provide some additional guidance regarding this matter. Thanks again!
Good morning, @SwedishChick.
Thanks for following up with us.
I've included some detailed instructions below to create a dummy account.
For additional information about creating accounts in QuickBooks Online, check out Add an account to your Chart of Accounts in QuickBooks Online.
However, as my colleague mentioned above, you'll need to consult with your accountant for further guidance with specific accounts and categories. If you don't have an accountant, don't sweat it. You can find one here in our Resource Center.
Please know you can reach out to the QuickBooks Community anytime you have questions or concerns. Take care!