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RK44
Level 1

Recording income and expenses

How do you record a shared expense 50/50 between an owner and vendor (co-owner)?

2 Comments 2
Anonymous
Not applicable

Recording income and expenses

Great to see you here, @RK44,

 

I can share some information on how you can record expenses in QuickBooks Online.

 

To get started, make sure both parties (owners) are set up as vendors in QBO. If the business expense is made using the owner's personal funds, you can enter a JE to record the transaction:

  1. Click the Plus icon (+).
  2. Choose Journal Entry.
  3. Enter the correct expense Account for the purchase.
  4. In the Debit column, enter the amount of the purchase.
  5. On the second line, enter the Owner's equity or Partner's equity.
  6. Add the purchase amount in the Credits column.
  7. Hit Save and close.

If you want to reimburse the owners for the company expense, you can enter it as a check or as an expense.

 

Reimburse using check:

  1. Click  the Plus icon (+).

  2. Choose Check from the list.

  3. In the Payee field, enter the name of the partner/owner.
  4. Enter the Bank Account for the reimbursement.
  5. In the Category column, select Partner's Equity or Owner's Equity.
  6. Add the Amount.
  7. Select Save and close or Save and new.

Record the refund as an expense:

  1. Click the Plus icon (+) on the Toolbar.

  2. Select Expense.

  3. In the Payee field, add the owner's name.
  4. Select the Payment account.
  5. In the Category column, choose Partner's Equity or Owner's Equity.
  6. Fill out the Amount of the reimbursement.
  7. Hit Save and close.

That should get you on the right track, @RK44. You can also refer to this article for the complete steps: https://quickbooks.intuit.com/community/Help-Articles/How-to-pay-for-business-expenses-with-personal...

 

All of this information is also available in our video tutorial on Recording Expenses with Owner Funds for your convenience.

 

If you have any questions with your account, I want you to know that I am here for you. Thanks for visiting our forums. Have a great day!

Rustler
Level 15

Recording income and expenses

@RK44 

owners are NOT vendors

 

Owners have equity accounts, if you have a co-owner that means you are registered as a partnership with the state and have a federal EIN.  If that is not true, then you need to seek the advice of a business tax accountant and maybe a business lawyer.

 

There is no shared expense in a partnership, the partnership is a business, it earns money and it pays out money for expenses.  At the end of the year you file a form 1065 and as part of that a form K-1 is created per partner showing their share of income and expenses

 

For a company taxed as a sole proprietor (schedule C) or partnership (form 1065), I recommend you have the following for owner/partner equity accounts  (one set for each partner if a partnership)

[name] Equity (do not post to this account it is a summing account)
>> Equity
>> Equity Drawing - you record value you take from the business here
>> Equity Investment - record value you put into the business here

 

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