How to record credit card payment with personal funds. Do I record the personal funds into owner contribution (cr) and the credit card account (dr).

yes you can do it that way

Mixing personal and business transactions in the CC account, whether the personal gets posted to QB or not, is considered commingling, and can cause problems with a court or various government agencies.  Dedicate the CC to the business, even if it is a personal CC, the nature of the transactions determine commingling.

Enter a Credit Card "return/refund" and the Expense reason is Owner Contribution. You don't need Debit-Credit.

As a brand new business owner, there were several things I had to purchase with my personal funds/credit card because I did not yet have a business card. For example, the fee to the state department of commerce for the business registration. I don't want to commingle, but I had no other way to pay for purchases prior to setting up my business account. Would I follow this same advice you gave: Enter a Credit Card "return/refund" and the Expense reason is Owner Contribution. You don't need Debit-Credit. 

Hi there, @newbieATthis.

Yes, you can record the business expense transaction made with a personal credit card using the solution provided by qbteachmt.

Another way to account for this is by creating a journal entry. Follow the steps below:

1. From the Plus (+) icon, select Journal Entry.
2. Pick the appropriate expense account in the first Account column.
3. In the Debit column, type in the amount of the transaction.
4. You can select the customer from the Name drop-down.
5. Choose Owner’s Equity or Owner Contribution in the second Account column.
6. Hit Save and Close.

Here’s an article for your reference: Create a journal entry.

Once ready to record the reimbursement, enter a check or an expense. All these transactions are available from the Plus or Create icon.  Check out this article for more details: Pay for business expenses with personal funds.

Leave a comment below if you ever need anything else. I’m always here to keep helping. Have a great day!
 

I've got this same situation. I have a business credit card that I used to make business purchases. Because the business was new, and I had no business funds to use to make the payment, I paid the credit card with my personal checking account.

Really struggling with how to account for this in quickbooks. Could you clarify your response?

Hello there, @rtm!

You can create a check to record the reimburse amount to your personal credit card used to purchase a business expense. I'm here to help you accomplish this.

First off, you'll have to enter the expense you purchase for your business. To do so:

1. Go to the Plus icon.
2. Under Vendor, select Expense.
3. Select a vendor.
4. On the Payment account menu, select your personal credit card account.
5. Choose an item or category for your purchase.
6. Enter the amount.
7. Click Save and close.

Once completed, here's how you can reimburse your personal credit card account for the expense you purchase for your business:

1. Go to the Plus icon.
2. Under Vendor, select Check.
3. Select a vendor.
4. On the Payment account menu, select your business account.
5. Choose your equity account on the Category column.
6. Enter the amount.
7. Click Save and close.

In addition, here's an article you can read to learn more about how you can pay business expenses with your personal funds: Pay for business expenses with personal funds.

Keep me posted if you have any other concerns. I'll always be around, ready to help. Have a good one!

Hello,

Thanks for your response. Maybe this is part of the problem, but I don't have any of my personal accounts in quickbooks, and I don't think I want them in there.

The way I was going to attack this is to create a "Cash Contributions" asset account that would receive any cash contributions that me or any friends/family donated to this business. Then, I would pay any bills or expenses (like this credit card payment) from that account. I couldn't get that to work though. Am I thinking about this the wrong way?

Yes - I am wondering the same thing. Did you get an answer to your question? Can you just enter it a a credit/refund in the Enter Credit Card Charges screen?

I am in the same situation and trying to figure out how account for the business credit card payments that were made from my personal bank account. Recording it as a "refund / credit" will make the balance correct but I am wondering if that will have any negative affects on my tax preparation.

Can anybody provide feedback on that?

Thanks. 

Did anyone find a solution to this? I see all of the QB moderators aren't understanding the transaction.

Whenever an owner pays for something for the business with personal funds, this is usually categorized as an Owner's Investment which is also called Owner's Equity, Owner Contribution, Contributing Capital or Owner's Deposit. You will also track Owner Draws or Owner Pay & Personal Expense under a separate account.  If you have more than one partner or LLC member you would create separate accounts for each in the Chart of Accounts to track contributions and draws accordingly.

The Right Way

Step 1: Setup Owner Investment Account 

Step 2: Setup Owner's Draw Account 

The Shortcut

Follow the prompts to add the accounts as you go

Typically when you are reviewing imported credit card transactions the payments will show as transfers. Since you do not have an account in QBO to transfer funds from you will change the transaction type.

Change the Transfer to a transaction by clicking Add

Vendor: You will add yourself as a vendor if you have not already completed the steps above

Category: Owner's Investment 

Click add

Voila

If you are entering an expense that you have paid with funds from a personal account you can use this same concept. Enter the expense as you would normally. On the second line put the expense under the Owner Investment Category and make the amount negative. 

See Also

Mixing Business & Personal Funds

Pay for Business Expense with Personal Funds

"Be kind for everyone you meet is fighting a hard battle."  

Similar situation:  Our owner paid for company credit card charges with his personal funds.  I've created journal entries to account for this, however, how do I now show the credit card charges as paid?  I use Desktop Pro.

Hi.  I have a similar situation where owners' paid for company credit card charges with personal funds.  I have made journal entries to reflect the owner contributions.  Now, how do I show that the credit card has been paid so I can reconcile?

I use Desktop Pro, so I'm not sure of the correct process for showing the credit card was paid. 

Thanks

Let me guide you on how to record the credit card payment, KellyDSK.

You can write a check to reimburse the expense after recording the journal entry. Here are the steps to follow:

1. Click on Banking at the top menu bar.
2. Select Write Checks.
3. Fill in the necessary information and select the Bank/Credit account you are reimbursing from (you can also use petty cash).
4. Select Partner's Equity or Owner's Equity under the Account column.
5. Enter the amount of the reimbursement.
6. Select Save and close.

Upon sharing this solution, I still highly recommend getting in touch with a professional accountant to record the transactions accordingly.

Once done, you can start reconciling your bank accounts.

I'm also attaching these articles for additional guidance about mixing business and personal funds in QuickBooks. Just know that these articles are for QuickBooks Online (QBO) but the idea works the same with QBDT.

• About mixing business and personal funds
• How to pay for personal expenses from a business credit card or bank account

Let me know if you have any other QuickBooks or banking questions. I'll always be here available to help!

My situation is a bit different.

Owner provided a personal CC for the company and dedicated it to the company.  

There were charges on the CC that he made and paid for with his personal funds to bring the CC to zero.  No reimbursement needed.

However, in order to reconcile the cc my bookkeeper entered all the personal transactions and paid those transactions from the "suspense" account, in order to reconcile and get an accurate balance. 

How do I clear that suspense account as she was just entering the transactions administratively so she could reconcile company charges to the cc?  Again it's a company cc and not used for personal transactions.  

thank you.

Hello FrankPeterson!

There's a better way to record the business expenses paid with personal funds. Let me explain.

You can record the business expense paid with personal funds using a journal entry. Select the expense account for the purchase and enter the amount in the Debits column. On the second line, select Partner's equity or Owner's equity and the same amount on the Credits column. Then, tap Save and close.

Once done, you can simply create a check or expense transaction to record the reimbursement. Go to the + New button and select any of them. Just make sure to select partner's equity or owner's equity on the Category details section, then enter the amount. Select Save and close.

With regards to the transactions paid by the suspense account, you can delete them and follow the steps I shared instead. However, it's best that you discuss this first with your accountant to see what's best for your business.

I've added some links you can check. These will show you how to link your credit card account and categorize downloaded transactions, as well as how to handle a personal expense in a business account:

• Connect bank and credit card accounts to QuickBooks Online

• Categorize and match online bank transactions in QuickBooks Online

• Pay for personal expenses from a business credit card or bank account

Keep on posting here and we'll help you. Take care always!

Thanks for responding Alex.  I understand utilizing the owners equity account if there were funds actually contributed.  

The owner transferred the cc to the company.  He paid the personal expenses with his personal money.  

The only reason the book keeper entered the personal transactions to QB was so she could reconcile the CC.

The only way she could think of to "pay" the cc was via the suspense account.  

These are not real transaction as money wasn't provided to the company.  We just needed the account to be zeroed for reconciliation. 

I just need to journal out the suspense account but don't know where to put it so it doesn't effect the books in either direction.  

.

Can you just do this once at end of year?

Hi @hnixon69, 

Before we can accomplish your goal for today, can you tell e more about your inquiry? Saying you need something about confirmation, is it about the recording of these entries? Or is it about the discussion of a certain user in this thread?

Keep me updated in the comments below. Hope to hear from you soon. Take care always!

This is actually for QB desktop version.

I have a client who paid an expense on our credit card directly from their checkbook to the bank so it didn't go through our books at all except the expense is on the credit card statement that was reconciled in my QB.  How do I record that payment in QB so my next cc statement will reconcile?

Thanks for joining us here, @RMcLaen.

I share the steps on how you can record the payment in QuickBooks. You'll have to make the expense billable. This way, you'll be able to record the customer payment and reconcile. Here's how:

First, go back to your expense transaction and make sure to mark it as billable. See the image below of what it looks like.

Next, create an invoice for the customer and apply the billable expense (above picture).

1. Go to the Home Page, then select Create Invoices menu.
2. Pick the customer's name from the drop-down and add the billable expense.
3. Tap Save.
4. From the invoice, click the Receive Payments menu at the top.
5. Review the Customer Payment details.
6. Click Save & Close.

With the above steps, you're able to record the customer paid expense and reconcile your credit card account.

Here are the links that'll guide you through the process.

• Add and match Bank Feed transactions in QuickBooks Desktop

• Reconcile an account in QuickBooks Desktop

Please don't hesitate to leave a reply anytime if you have other questions or concerns with customer expenses. I'll be around for you. Take care and have a great rest of the week.

If you don't mind could you please tell me how to do this on Desktop? Also I don't necessarily need it paid back right now but later at a time of my choosing.

I’ve read through the thread and don’t feel like this question was ever really answered for the situation where an owner paid a business credit card with a personal checking account that’s not linked in QuickBooks. What is the correct way to record this?