Can deposits made to Business checking, that are from personal funds be categorized? Where would you categorize it?

Hi there, Janet.

Thank you for reaching out with your question about categorizing personal funds deposited into your business checking account in QuickBooks Online (QBO). It's great to see you're proactive in managing your business finances accurately.

When you deposit personal funds into a business account in QBO and these funds are used for business purposes, you'll need to categorize this transaction as either an Owner's Investment or Owner's Equity. This reflects the money as a contribution to the business rather than regular business income or sales. 

Here’s how to record and categorize this in QBO:

1. Click on the + New button and select Bank deposit.
2. From the Account drop-down menu, select the business checking account where the deposit was made.
3. In the category column, you can select Owner's Equity. If this category isn't available, you'll need to set up an equity account first.
4. Enter the amount of money you have deposited.

You can also check out this article to learn more: Record an owner's contribution or capital investment in your business.

After that, you can consider recording a paying back a capital investment in QuickBooks Online.

If you have any more questions or need further assistance with categorizing your funds in QuickBooks Online, feel free to ask. I’m here to help!

Hi Janet,

Hope you’re doing great. I wanted to see how everything is going about categorizing personal funds deposited into your business checking account you had the other day. Was it resolved? Do you need any additional help or clarification? If you do, just let me know. I’d be happy to help you at any time.

Looking forward to your reply. Have a pleasant day ahead!

Thank you Mark your answer is very helpful! I had the same question. We just started our business last month and I'm working to understand QuickBooks and bookkeeping. We initially deposited cash into the business checking account for business startup expenses. This would be considered my opening balance, right? Do I categorize this deposit as an Owner's investment, or Owner's Equity? What is the difference? Thank you for your help!

Yes, Audrey. The first cash deposit into the business checking account is your opening balance. I'll help you clear things up.

An owner's investment refers to the money or assets that a person contributes towards starting or running a business. The owner's investment is usually recorded on a capital account where each business member has their own individual capital accounts.

Owner's equity, on the other hand, represents the owner's stake in the business and is calculated as the difference between the business's assets and liabilities. It includes the initial and additional investments and the owner's share of the business's profits. To ensure accurate categorization, I'd recommend consulting your accountant. 

Moreover, you can run reports to track your finances or balances in QuickBooks Online.

Return to this thread should you have further questions about business accounts in QuickBooks. You can count on me 24/7. Keep safe. 

Owner Contribution.