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jjgfromnj
Level 1

Paying business credit card from personal funds

Assuming the expense has already been recorded elsewhere, how do I record a payment to a business credit card using personal funds? Can I just assign this to Owner's Draw or Owner's Equity?

4 Comments
Jovychris_A
QuickBooks Team

Paying business credit card from personal funds

Thanks for posting to the Community, @jjgfromnj.

 

It isn't advisable to mix personal and business funds whereas the nature of the transactions determines to commingle.

 

However, you may encounter situations that will require you to do so. Assumed that you've recorded the expense, to record the business expense using personal funds, you can follow these steps:

  1. Go to the Company menu and select Make General Journal Entries.
  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 Investment in the second Account column.
  6. Hit Save and Close.
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Here's an article as your source: Create a journal entry in QuickBooks Desktop.

 

For more details on how to record a payment to a business credit card using personal funds, you can refer to this article: How to Record Expenses Paid by Paid by the Owner's Personal Funds.

 

Please feel free to leave a message to this post or tag me (@Jovychris_A) if you need further help. I'll be around to guide you. Have a good one!

jjgfromnj
Level 1

Paying business credit card from personal funds

Thank you. I have a follow-up questions. Let's assume that the individual expenses were entered into QB via a feed from the CC bank. And further assume they are in the CC register, and I've assigned expense categories to each of them

If I then enter a J/E where the debit side is the expense account and the credit side is Owner's Equity, won't that "counterbalance" (or cancel out) the original expense? Is there anything wrong with me just entering a transaction into the CC register that comes from Owner's Equity? For what it's worth, I use QBD, not QBO.

jjgfromnj
Level 1

Paying business credit card from personal funds

@Jovychris_A Wouldn't using the expense account in a journal entry zero out the expense that is entered elsewhere? Any reason I can't just enter a transaction into the CC register that uses Owner's Equity as the account, to make the CC account balance 0?

Jovychris_A
QuickBooks Team

Paying business credit card from personal funds

I appreciate your response a lot, @jjgfromnj.

Yes, it has to be dedicated CC for the business. Whether it is personal funds or business at the CC makes no difference to your accounting.
 

What is important is that it starts with a zero balance and only business transactions are paid with it.
 

I also suggest consulting your tax CPA for help. They know how to do it very well and what the CPA tells you makes some sense.
 

Just in case, I've already updated my answers above, including the articles for reference in doing so.
 

Please let me know if you have more questions in QBDT. I'll keep my notifications open. Stay safe!

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