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lostinaccounting
Level 2

Owner withdrawals and contractor payments

Admittedly, I am a bit frustrated after 2.5 hours of online chat to no avail :(  There are so many different QB products (online payroll, intuit payments, bill pay, etc. etc.) I am tripping over my own feet. 

 

I am wondering if there is an option/sub within QBO (as in not using a third party like bill.com) to accomplish the following:

 

  1. pay myself with withdrawals as an owner of the company. my understanding is this is different than paying employees; I'm not an employee, it's an owner withdrawal, not an employee payment, right? I actually want to "move the money" - not just track it.
  2. using the same system, if possible, or a different sub/system if need be, pay myself (and others) as contractors. again, I am trying to actually move the money here-make payments to contractors through QBO, which include me (I pay myself as a contractor from time to time (commission) AND need to be able to make withdrawals as an owner (#1)

 

If using checks is the only option for #1 (my understanding is contractor payments can be set up in QBO) is there an automated option there? I don't want to physically print, sign or mail checks-I am trying to do this all electronically. If that means someone from QB sends a check on my behalf, I'd be open to that.

 

Thanks. 

1 Comment 1
MirriamM
Moderator

Owner withdrawals and contractor payments

Hi there, @lostinaccounting. I appreciate you contacting our Support Team about this. 

 

Let me get the help you need in recording an owner's draw in QuickBooks Online (QBO).

 

If you're a sole proprietor, you must be paid with an owner's draw instead of an employee paycheck. 

 

If you're still unable to create an Equity account, here's what you'll need to do:

  1. In the left menu, click Accounting
  2. Go to the Chart of Accounts tab.
  3. Click the New button.
  4. From the Account Type drop-down, choose Equity.
  5. From the Detail Type drop-down, choose Owner’s Equity.
  6. Enter an opening balance. 
  7. Click Save and Close.

Once done, write a check:

  1. Click the + New button in the left menu.
  2. Select Check.
  3. Pick the bank account where your money will be withdrawn.
  4. Fill in the necessary fields.
  5. In the Account field, select the Owner's equity you created.
  6. Select Save and Close.

For more details, see this article: Set up and pay an owner's draw.

 

As for paying a contractor, you have the option to use Direct Deposit, take a look at this article to learn more about this: Pay a contractor with direct deposit.

 

If there's anything else I can do for you, feel free to reach back out. I'd be happy to help. Have a great day.

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