In your Chart of Accounts you should have an Equity type account possibly called Owner Equity or something similar. And there may be two Sub Accounts for Distributions or Draws and for Investment.
Also in the Chart of Accounts you should have a Cash Account (Cash on Hand or some sort of Acct for Cash.)
I'd check with your Tax Accountant as you may need to rename these for your type of company (LLC, S-Corp, etc.) But for now, if the Equity Accounts don't exist, I'd set up:
Owner Equity
- Owner Draw
- Owner Investment
(Also set up the Cash Acct if needed, it typically is set up as a Bank Acct.
Owner Draw would be where you take money out of the company, different than Salary if you pay yourself.
Owner Investment is where you put money into the company.
So you'd show a deposit into the Cash Acct and show Owner Investment for the associated Account. Then go "pay" the the Invoice and use the Cash Acct.
You've now shown a clear path of your investment into the company and the Cash going back out to pay an invoice. And again, your Accountant may want to make changes, but that's simple to do later if needed.
