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Pure Sole Products
Level 1

Recording expenses when purchased on personal credit cards

I have Quickbooks Online. I've seen a couple other questions posted in this community regarding this topic but every one of them had different answers and the answers weren't very clear. My partner and I just purchased a company a couple weeks ago. We're an LLC but were waiting forever to get our paperwork so we could open a business bank account. So in the meantime, we've been purchasing everything on our personal credit and debit cards.

 

My questions are:

 

-Is there an easy way to record these expenses in Quickbooks Online?

-How do we go about reimbursing ourselves for these expenses?

 

Thank you so much for your help  

 

 

1 Comment 1
JamesDuanT
Moderator

Recording expenses when purchased on personal credit cards

Good to see you and welcome in the Community, Pure Sole Products.

 

I agree that there are quite a lot of posts related to your questions here. These answers are based on their different perspectives and understanding of the questions.

 

Though we don't recommend mixing business and personal transactions, sometimes we can't really avoid this kind of situation. Here's the workflow that we can follow to record the business expenses paid by personal funds:

  1. Create a bank account that represents your personal funds account.
  2. Create an expense transaction affecting the personal funds account.
  3. Record a check affecting your business account while reimbursing the personal funds account.

Here's how to create the personal bank account:

  1. Click Accounting on the left menu and select Chart of Accounts.
  2. Click the New button and enter the details of your personal funds.
    Note: You can leave the Balance field blank if necessary.

     
  3. Click Save and Close.

Here's how to create an expense transaction:

  1. Click the +New button on the left menu and select Expense or Check.
    You can review this link to know the difference between expense or check.
  2. In the Expense or Check window, select the personal funds account in the Payment account field.

     
  3. Under the Category details section, enter the expense accounts and the amounts.
    You can reach out to your accountant if you're unsure what expense account to use.
  4. Click Save and close.

Here's how to create a check to reimburse the personal funds account:

  1. Click the +New button on the left menu and select Check.
  2. In the Check window, enter the business funds account in the Bank Account field.
  3. Under the Category details section, enter your personal funds account and the amount you want to reimburse.
  4. Click Save and close.

You can also use the Transfer feature to move the amounts from one bank to another: Transfer Funds Between Accounts.

 

That's how we do it in QuickBooks Online. Even so, I'd still recommend consulting your accountant for best advice. Have a great day!

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