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Hello Group!
I have been using Quickbooks Self-Start online for the past year. I am trying to clean-up my books to prepare for tax time.
Part of the year I had transactions/expenses that were paid from a personal account for business purposes. What is the best way to handle those transactions? The personal account used to pay for those business expenses can't be reconciled in QB, right?
Should I inactivate the personal bank account that is still showing up in Quickbooks, if I am no longer paying via that account?
Suggestions? Much appreciated.
Thank you,
Erin Leighty
Let me guide you on how you can handle expense transactions that were paid via personal account, leightylandscapingMT.
We don't recommend mixing your business and personal funds, however, we know this happens sometimes. You can create a journal entry to record the business expense you paid for with personal funds. To do this, follow the steps below:
Once done, you can select from the two options on how the money was reimbursed.
Option 1: Record the reimbursement as a check
Option 2: Record the reimbursement as an expense
In addition, if you need to keep a personal expense out of your business finances, you might as well exclude them.
For your reference, you can read these articles for additional information:
If there's anything else that you want to help with your transactions, let us know so we can assist you.
Hello,
Thank you for your prompt response. I think I understand the steps I need to take; however I have a few more questions.
There are a lot of expenses currently added in Quickbooks that were paid via my personal account. Should I first remove all of those expenses that were allocated to my personal checking and add NEW journal entries for each of those?
If so, and I need to add each journal entry for expenses previously entered incorrectly, then for each entry I need to add a reimbursement from my business to personal account?
Thank you.
Hello @leightylandscapingMT,
Let m help share how you can reimburse expenses paid with your personal account in addition to the suggestion shared by my colleague above.
Yes, it is recommended to remove all your expenses allocated to your personal account before adding the appropriate journal entries to avoid creating duplicate transactions in your records.
To do so, here's how you can delete expenses in your personal account:
However, I'd still recommend contacting your accountant for advice in choosing the category and how should you handle your journal entries. If you haven't yet, use this link so you can find a bookkeeper near you: Business is better with a ProAdvisor.
Additionally, I've also included this reference for a compilation of articles you can use while working with us: Expenses and Vendors for QuickBooks Online.
If you have any other questions, please let me know in the comments below. I'll be here to lend a hand.
Hello,
Thank you for the information. So, my business is single-member LLC. I found this information in the Quickbooks Q&A: https://quickbooks.intuit.com/learn-support/en-us/expense-accounts/pay-for-business-expenses-with-pe...
So based on those instructions/video, it sounds like I could actually edit those expenses already entered in Quickbooks that were paid via my personal account, and just update each one, including the Owner's Investment line and entering the negative amount (amount from expense). IS that correct? If so, that would save me from deleting all of those and creating a journal entry for each one.
Thanks,
Hi there, @leightylandscapingMT.
I'd like to ensure that you'll be able to record your transactions accurately in the system.
Yes, you're correct. You can add the equity account to your expenses and use a negative amount to zero out the expenses on your personal account. This way, you won't have a balance on your balance sheet.
However, to ensure the accuracy of your books, I still recommend consulting your accountant. They'll be able to provide you the best course of actions to be taken in this situation.
Know that you can always visit our ProAdvisor site to get in touch with our accountants: Find an accountant or bookkeeper who loves your business as much as you do.
Lastly, I'm sharing this reference that you check out in the future to help you in reconciling your accounts smoothly: Learn the reconcile workflow in QuickBooks.
Let me know if there's anything else that I can assist you with. I'll be right here to help. Take care!
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