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userinfo18
Level 1

Do I have to add the owners personal bank account in order to process an ACH payment for owner's draw?

 
1 Comment 1
MaryAnn_E
QuickBooks Team

Do I have to add the owners personal bank account in order to process an ACH payment for owner's draw?

Hello there, @userinfo18.

 

To handle the owner's contribution, you need to set up an owner's draw account as an equity account. An equity account is used to track withdrawals of the company's assets to pay an owner. If you're a sole proprietor, you must be paid with an owner's draw instead of an employee paycheck.

 

To create an Equity account, here's how:

 

  1. Click the Gear icon, then select Chart of Accounts.
  2. Click New.
  3. From the Account Type drop-down, select Equity.
  4. From the Detail Type drop-down, choose Owner's Equity.
  5. Enter an opening balance.
  6. Click Save and Close.

After creating the account, you can write a check from an owner's equity account to pay them.

 

You can read through these articles for detailed information:

 

 

Most importantly, I still recommend checking with your accountant for more guidance. He/she may add suggestions based on what's more suitable for your business and to your books.

 

If you have other questions, you can always visit us back here.

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