Entering receipts & expenses paid by owner's personal investments

Hello, lightbyliv!

Welcome and thank you for taking the time to post today!

Yes, you can record those start-up expenses and use equity accounts since they were paid using your personal funds. Here's an article with steps for you to follow: Pay for business expenses with personal funds.

After recording the transactions, you can match your downloaded transactions to them.

Let me know if you have other questions in mind, Take care!

Hi Jess! Thank you for your response. Another related question just to clarify - when I am reviewing uploaded receipts, it requires me to put a "Bank/Credit Account". Should I create a "credit" account called Owner's Investments and link the receipt to that? Or should I just link it to my business bank account even though that's not what was used to make the purchase?

You're welcome, lightbyliv!

It's good to see you again! Hope you're having a great day!

Instead of uploading receipts, you’ll want to record them as journal entries, as stated in the article. It will not require you to post the amounts to a bank or credit card account.

Let’s say you bought office supplies, your JE will be a debit to an expense account and a credit to an equity account. This is just a sample. It's best to seek advice from an accounting professional.

You can also check your equity account balance in the Chart of Accounts as you make journal entries.

I'm just right here if you still have other questions about those startup expenses.

I went through and took pictures of all my receipts from personal and uploaded them then I created an expense sheet like the one you showed. Did I do to much I was trying to match them and seen I was not able to. Should I erase the scanned receipts that were from personal money?

I’ll help you link your receipts to your expense transactions, @Dyerhomeimprovements.

You don't have to delete the images you uploaded. We just need to check their file types to see if they're PDF, JPEG, JPG, GIF, or PNG. If you’re using a recent version of the iPhone or iPad, your shots could be in the HEIC format. You’ll need to convert them to a compatible format.

Additionally, we’re unable to recognize the text on the scanned receipts. They’re not in your books yet, so you’ll need to manually match them with the transactions. 

If the reason why you’re unable to find a match is that there’s no record found, we can create a new transaction from your receipt.

Here's how:

1. Select Review to make corrections or add missing info.
2. Tap Save and next.
3. Click Create expense.

Since you mentioned you’re using an expense to reimburse a personal expense, let’s also review the details you entered on it. For the step-by-step process, check out this article: Pay for business expenses with personal funds.

You can read this article to review and match your receipts: Upload your receipts and bills to QuickBooks Online.

Feel free to leave a comment below if there's anything else you need help with. The Community and I will always be around to provide additional assistance.

I notice that one of the original poster's questions never got answered, and I have the same one. I took pics of all of my receipts to associate with an expense report. That works fine. However, when I am reviewing the receipts, it is asking me to choose a "Bank/Credit account". I do not know what the purpose of this categorization is to pick the right account.

@lightbyliv did you ever get an answer to what bank/credit account to use?

But it doesn't show up as an expense that way.  How do you get it to show up in expenses?

I'm a 2-owner biz, and just started to test the Scan Receipt function. Here's my 2-cents worth.

Current Way:

We create a journal entry based on the entire year's expenses and then enter by line, according to the Chart of Accounts, what was spent. Payee: Owner A or Owner B.

The downside to this is that some of the receipts have faded by the time we collate them at mid-year or year-end to do this. So Scanned Receipt function was a welcome option.

While the Pay for business expense with personal fund step-by-step is clear and useful, I'm wondering if we can skip entering these from a PC or Laptop and use directly from the Scan Receipt function on-the-go?

If the team can enhance the steps/systems by adding a "Create a New Journal" and "Add to Journal", besides an Expense? These options are so that we can then accrue to pay out later. This will make the Scan receipts useful to us while on-the-go and also take care of the "Account" issue we see on the phone when we use the scan function (bcos currently, it all links to the bank).

New Way (I hope to see):

1. Scanned Receipt

2. Dropdown to choose a payment method to incl. Partner Equity and Owner Equity

3. Choose to Create New Expense, New Journal or Link to Existing Journal No. (filtered by Partner or Owner option above).

4. Select Category

5. Enter the Description

6. Backend: Auto-create a negative amount under "Owner/Partner's investment" and copy out entry from Steps 4 to 5. (Which will take care of the above video steps from 1:05 to 1:27).

Hello there, DI-JK.

I can see how having this option would be helpful for you and your business. While this isn't available yet, I suggest sending feedback directly to our product developers. They're always for ideas to consider on how to improve QuickBooks Online. You can refer to these steps on how to submit feedback: 

1. In your QuickBooks Online account, go to the Gear icon.
2. Select "Feedback."
3. Type in your suggestion and click "Next."

If you want to get updated on our latest happenings, you can visit this link: QuickBooks Online Blog.

I also recommend visiting our website for more tips and other resources you can use in the future: Self-help articles.

Please know that I'm only a post away if you have more questions about this or anything else. I'll be here to help. Keep safe.

I'm having a problem with my entry and wondering if you can help me enter this a better way.  This is when the owner uses personal funds to pay a 1099 contractor.  This is how I'm entering the transcation:

                              debit           credit                                  Name

Owners Inv                                350                                    1099 Contractor's Name

Sub. Exp.               350                                                        Name of Job

My problem is when I run the 1099 report it shows the $350 added and then subtracted right out.  How can I enter this tranasction to show a subcontractor expense attached to a job, as well as the payment to the 1099 contractor without it being cancelled out and show it came from the owner's personal money and not a business account?  It's not often, but it does happen.

PLEASE HELP!!

Thanks for posting here in the Community.

Allow me to share with you the guidelines that could help achieve your goal.

Although we recommend not combining business and personal funds, we understand that it does happen on occasion. In that case, you'll want to reimburse the money as a check or as an expense. I'll show you how: 

First, switch to the Accountant view if you're in the Business view.

To record the reimbursement as a check:

1. Go to + New, and select Check. 

2. Choose a bank account to use to reimburse personal funds.

3. In the Category column, click Partner's equity or Owner's equity.

4. Enter the amount to reimburse.

5. Save and close or Save and new.

Please refer to this article for the second option on how to record the reimbursement as an expense: Pay for business expenses with personal funds.

You can visit this article to learn how to add your bank and credit card accounts to QuickBooks Online and download your transactions: Connect bank and credit card accounts to QuickBooks Online.

Feel free to post again for further questions. Stay safe!

Thank you for your reply!! That would work if there was a direct payment for that reimbursement.  I only have 3 transactions like this and it was when the business first sarted.  I watched the video link you sent and it created the same problem when I ran the 1099 report, the 1099's pay was added in and then taken out.  So assuming it was paid out from personal and not immedaitely reimbursed, this change seemed to work and applied the funds in all the right places, meaning the sub showed payment towards a 1099, the job got an expense for a subcontractor and the owner's Investment shows he still has those funds invested in the company.  Does there seem to be a problem with this entry from an accounting standpoint?

                              debit           credit                                  Name

Owners Inv                                100                                    Name of Job

Sub. Exp.               350                                                       1099s name

I think it seems I just had the job and 1099's name backwards in transaction?

Greetings, @computermomof6.

I understand you want to know the accurate expense accounts for the two items you mentioned. I'm here to route you in the right direction to solve these accounting concerns.

We can reach out to our accountants with this matter since they are the ones to know what expense accounts to use. 

Here's how:

1. Sign in to your QuickBooks Online company.
2. Click on the Gear Icon > Manage Users.
3. Go to the Accounting Firms section.
4. Enter your accountant's email address and first/last name (optional).
5. Click Invite. They will receive an email with a link for signing in to your company.
6. Click Next and Finish.

Once done, inviting an accountant, your accountant will have admin access to your company data. Have this article for more information: Add accountant users in QuickBooks Online. It also includes steps to remove them.

Stay in touch with us if you need further assistance. We're always around to assist you anytime. Have a great day!

I am in the same situation as the original poster.  The Journal Entry process works great. HOWEVER, the transactions don't seem to show up in the Vendors' Accounts. So I am not able to create 1099's listing all of the expenses I paid to the vendor.  How can I overcome this?  Thanks.

Did you ever find someway to get through this problem? I'm having a similar difficulty, I started as a sole proprietor and have since moved away from using my personal account but there are a few months of me paying my 1099 contractors out of my personal account. The videos I have watched suggest putting in journal entries but these show up as zeroes on their 1099's

I've checked the link you sent about entering an expense, and second lines is the Owner investment, however in my case I have sales taxes. Could you please advise what I should do? I cannot apply the same sale tax codes on both line, it will result to 0 balance. 

So I googled this topic hoping to find a shortcut because I know how to do this the long and laber intensive way.

You assign the account to cash, at least thats what I did because my client doesnt use this account. All their transactions go through the bank, or electronic avenues.

from the receipts tab you cannot do all the work and completely match it to an owners equity account. You must create the expense in the receipts tab and then go down to receipts, find the transaction you just added and edit it. You then add a second line with owners equity and a negative amount matching the positive amount. This will zero out the expense so it will not affect whichever payment account you signed it to. Then you save and close and then create the expense. now you have to go through and do this one by one because no one told us their faster/ secret way of doing it lol.