Get 50% OFF QuickBooks for 3 months*

Buy now
cancel
Showing results for 
Search instead for 
Did you mean: 
Announcements
Deemo
Level 1

Recording Deferred Owner Payments help needed

Hello.  My biz is a two member LLC, and we are pretty new.  The projects we sell come with initial deposits that we use for operating capital, but there are periods of time in between that no cash is coming in, but we want to record an IOU to the two members that we can settle up when the next project deposit is received.  Let's say we want to "earn" at a rate of $2000 per week, but don't have the cash to that until the next deposit is received.  How would we record the IOU, or deferred draws, now and then settle it out once the next project deposit arrives?  Thanks for any input.

1 Comment 1
Rustler
Level 15

Recording Deferred Owner Payments help needed

A 2 (or more) member LLC is a partnership, as long as you will be taxed as a partnership then I suggest each have the following equity accounts

[name] Equity (do not post to this account it is a summing account)

>> Equity ( first of the year roll up drawing and investment into this account as well as retained earnings)

>> Equity Drawing (record the value you take from the business here)

>> Equity Investment (record the value you put into the business here)

 

Then when you add money to the partnership you deposit it and use [name] equity investment as the source account for the deposit

 

when you want to be paid back, write a check and use [name] equity drawing as the expense (reason) for the payment

Need QuickBooks guidance?
Log in to access expert advice and community support instantly.

Need to get in touch?

Contact us