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I paid business expenses using a personal credit card before I had revenue coming in through the business. How can I reimburse myself or pay those expenses?

Is there a way to pay all business expenses from my personal credit card?

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Best answer 10-19-2018

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There are several ways to do paying business expenses fro...

There are several ways to do paying business expenses from personal funds, this is one I prefer

1. Create a dummy bank account called owners, use write checks (do not print them, they are just a form for entering transactions) on that account to enter and pay the bills/expenses.

2. When you are finished, the balance will be negative, make a deposit for the total amount and in the account block select

for a sole proprietor - owner equity, or better owner equity investment (technically you can not borrow from yourself, if you want to be paid back you use equity drawing for that payment)
for a c- or s-corp  - create a current liability account named due-from=[name] and use that
for a partnership - owner investment OR the liability account like the corporation


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Established Community Backer ***

There are several ways to do paying business expenses fro...

There are several ways to do paying business expenses from personal funds, this is one I prefer

1. Create a dummy bank account called owners, use write checks (do not print them, they are just a form for entering transactions) on that account to enter and pay the bills/expenses.

2. When you are finished, the balance will be negative, make a deposit for the total amount and in the account block select

for a sole proprietor - owner equity, or better owner equity investment (technically you can not borrow from yourself, if you want to be paid back you use equity drawing for that payment)
for a c- or s-corp  - create a current liability account named due-from=[name] and use that
for a partnership - owner investment OR the liability account like the corporation


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How do you create a "dummy" bank account when QB makes yo...

How do you create a "dummy" bank account when QB makes you connect everything?
Established Community Backer ***

bank type account, cash

bank type account, cash
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@Rustler Related to the same question, can you pay direct...

@Rustler Related to the same question, can you pay directly to your personal credit card company using your business checking account to cover for the part that is business expenses? And then just record it as a business expense in quickbooks.
Thank if you can help to clarify this.
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Re: @Rustler Related to the same question, can you pay direct...

 wondering the same thing???

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Re: There are several ways to do paying business expenses fro...

when you reimburse the shareholder for business expenses put on the personal credit card is it then an owner draw? or owner distribution? or what?

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Re: There are several ways to do paying business expenses fro...

The version of QuickBooks I am using I only have the option of entering a VALID account, is there a way around this that you know of?

QuickBooks Team

Re: There are several ways to do paying business expenses fro...

Hi DuncansPools,

 

You can set up dummy bank account in the chart of accounts. Please make sure to leave the bank information blank. 

  1. Click Company located at the top.
  2. Choose Chart of Accounts.
  3. Click the Account drop-down list located at the bottom.
  4. Select New.
  5. Choose Bank and click Continue.
  6. Enter the Account Name, and leave the bank information blank.
  7. Click Save & Close.

Once done, if you're prompted to set up the bank feed, just click No.

 

Please let me know if you have any additional questions about QuickBooks. Thanks.

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Re: There are several ways to do paying business expenses fro...

Awesome!! Thank you :)

Established Community Backer ***

Re: There are several ways to do paying business expenses fro...

Never pay the Personal Credit Card directly from the business. That looks bad. Remove the funds properly, as draw or whatever applies. Then pay your own Personal Balances, personally.

Established Community Backer ***

Re: There are several ways to do paying business expenses fro...

No, it is just a reimbursement to someone for paying or purchasing an item for the company so it is just a reimbursement, same as to any other employee.

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Re: There are several ways to do paying business expenses fro...

Thank you for this. Very simple and does exactly what I needed to do.

QuickBooks Team

Re: There are several ways to do paying business expenses fro...

That's what we love to hear, @truebluefirm.

 

A lot of effort went into making QuickBooks Online as user friendly as possible, so we're thrilled to hear that you're having an easy time with it.

 

Your QuickBooks subscription includes a variety of features, so be sure to check out our Community tutorials if there are any you haven't tested out yet.

 

Also, check out our blog to see what's in store: https://intuit.me/2L2zqTv.

 

Always feel free to drop by the Community if you have other questions managing your expense transactions. I'm always here to help.

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Re: There are several ways to do paying business expenses fro...

Wouldn't the liability account be Due TO- name? If the company owes it back to the owner then it is due to and should be an Other Current Liability. When a business owner takes distributions in excess of the basis of the company is when you create a Due From- name account and it is an Other Current Asset. 

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Re: There are several ways to do paying business expenses fro...

I'm doing quickbooks online for the first time.  I am trying to sort out some books for a friend.  They started a business and put alot of stuff on there personal credit card then proceeded to make payments to that credit card out of the business account.  I know this is wrong but I'm not sure how to fix it.

 

 

Content Leader

Re: There are several ways to do paying business expenses fro...

Welcome to the Community, @CarolLeslie1. I'm here to share information about paying business expenses with a personal card.

 

As you mentioned in your post, it's generally not recommended to mix personal and business funds, but there may be times where it's necessary. I recommend the following article as it covers the process of recording and reimbursing business items purchased with personal funds: How to pay for business expenses with personal funds.

 

Also, I wanted to take a moment and mention that I think it's nice of you to lend a hand and help with your friend's books. Since you also mentioned that you were new to QuickBooks Online, I wanted to link some video tutorials to help you get the most out of the software. Here you can access over one hundred videos on topics ranging from getting started to tracking sales: QuickBooks Video Tutorials

 

Please let me know if you have any questions about the article or anything else. Have a great day. 

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