Business expenses on personal credit cards for SMLLC S Corp

CDS-LLC · ‎August 21, 2021

Hi all,

Let me preface by saying I'm new to QB. I recently started working as an independent contractor that will ultimately receive a W9 from a company that connects me with their clients. I'll travel to their clients operational area and provide consulting services so there is no inventory, cash sales, or real estate costs. I've formed a single member LLC and filed as an S Corp with the IRS.
I travel and work in the operational area for about 10 days straight so I've incurred food and some travel expenses. I've been using my personal credit cards to pay for these. What is the best way record these expenses in QB? Thanks so much !

LieraMarie_A · ‎August 21, 2021

I've got the steps you'll need in tracking personal money in your business, @CDS-LLC.

Follow these instructions to record the business expense you paid for with personal funds:

Select + New.
Select Journal entry.
On the first line, select the expense account for the purchase.
Enter the amount in the Debits column.
On the second line, select Partner's equity or Owner's equity.
Enter the same amount in the Credits column.
Select Save and close.

For the reimbursement, you have two options. You can record it as either a check or an expense. For the detailed steps, follow this article: Pay for business expenses with personal funds.

I'm also adding these links that might be helpful for you in case you pay for personal expenses from a business bank account:

If you have other questions or concerns, please let us know. We're always here to help. Have a wonderful day.

View solution in original post

LieraMarie_A · ‎August 21, 2021

I've got the steps you'll need in tracking personal money in your business, @CDS-LLC.

Follow these instructions to record the business expense you paid for with personal funds:

Select + New.
Select Journal entry.
On the first line, select the expense account for the purchase.
Enter the amount in the Debits column.
On the second line, select Partner's equity or Owner's equity.
Enter the same amount in the Credits column.
Select Save and close.

For the reimbursement, you have two options. You can record it as either a check or an expense. For the detailed steps, follow this article: Pay for business expenses with personal funds.

I'm also adding these links that might be helpful for you in case you pay for personal expenses from a business bank account:

If you have other questions or concerns, please let us know. We're always here to help. Have a wonderful day.

MRGemini · ‎March 31, 2022

What do you do if you are pulling in a mixture of business and personal expenses from a connected personal credit card? We inadvertently didn't know when starting a quickbooks account to not connect in a personal card because it might overcomplicate things. Every expense since has been moved to a business card only.

Essentially trying to figure out how to attach the business expenses only and exclude the personal expenses from the personal card and make our liabilities zero. We pay 100% of the credit card each month.

Additionally once resolved to deactivate or disconnect personal card from pulling any further info in automatically that throws off the numbers.

MarsStephanieL · ‎March 31, 2022

Hi there, @MRGemini. Allow me to share some insights about managing your personal and business expense with your credit card in QuickBooks Online (QBO).

Mixing your personal and business expenses isn't recommended. It is to ensure that you have tracked the income and expenses properly and to avoid getting problems in the future. It's good that you've moved business expenses to your business card.

In case you want to exclude personal expenses from your card and make it zero, I'd recommend creating an Owner funds account and categorizing the personal expenses there. Then, at year-end or month-end you can make one deposit as Equity to bring this account to zero.

I'd also recommend speaking with your accountant to help you assess these processes. Your accountant will give you the best advice that fits your business needs. If you don't have one, you can check out this link: https://intuit.me/2WQuAio.

Moreover, disconnecting an account that's linked to the Banking page is alright so long as you've categorized all the transactions in it. This is done to avoid invoices or bills being open even though it has been paid. Also, let the account stay in your Chart of Accounts if you've decided to disconnect the bank feeds to retain the categorized transactions.

I've included some articles for your reference about the points I've mentioned above:

Please let me know if you have any questions or concerns. I'm always around to lend a hand. Enjoy your day!

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Business expenses on personal credit cards for SMLLC S Corp