My client currently uses his personal Home Depot credit card to purchase job materials for his business. He is paying the monthly credit card account with his business checking account because the credit card was used for business purchases.
What is the appropriate way to record those payments in QB Online?
How's your day going so far? I hope all is good. Thanks for taking the time to post here in the Community. I'm happy to help ya out.
In QuickBooks Self Employed, you have three types of transactions. The three types of transactions are Income, Expense, and Transfer. I recommend that you use our Transfer transaction type and categorize the money transfer.
Money transfers between your connected accounts also show up in QuickBooks. Usually, this is when you move money between your business or personal accounts. We can categorize transfers as Transfers in QuickBooks to keep your accounting clean and accurate.
You can use our Credit card payment category to record the Home Depot credit card purchases. These transfers aren't business expenses since you're not actually buying anything. Instead, you're categorizing the payment he made to his bank or credit card for business purchases he already made.
Allow me to provide you the difference between QuickBooks Self-Employed (QBSE) and QuickBooks Online (QBO), 1Tweety.
QuickBooks Self-Employed is designed specifically if you need to file a Schedule C document with Form 1040 and caters only to simple business structures. Whereas, QuickBooks Online is more advanced than QBSE and allows you to do basic accounting tasks such as sending invoices and inventory tracking. So in general, entries on both QuickBooks versions may be slightly different.
To record the business expense you paid for with personal funds, you can create a Journal Entry. You can follow the steps below:
Click + New.
Select Journal entry.
On the first line, select the expense account for the purchase.
Enter the purchase amount in the Debits column.
On the second line, select Partner's equity or Owner's equity.
Enter the same purchase amount in the Credits column.