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reimbursements

I am assisting my mother-in-law (MOL) with her personal finances, her  "business", and setting up the QB Online account. She is responsible for overseeing her mother's (MH) finances and must submit an annual report accounting for all her mom's financial dealings.  Thus, I am using the accrual method and setting MOL and MH up as their own "company".

That said, my plan was:

When MOL uses a personal account to pay for MH's expenses, i will  "bill"MH's "company", inturn when the "bill" is paid (reimbursed) from MH's "company" it would reflect as income to MOL's "company".

 

My question is - the paying for an item with personal funds would be considered an "expense", billable to MH and reimbursable to MOL. So am I correct in creating an "reimbursable expense" as an expense in the chart of accounts, and creating a "reimbursement income" an other income? All my experience is in bookkeeping for companies, and that's the perspective I'm trying to apply from, yet it's not truly a "company" and therefore has some variations.  SIGH!!!  Thanks, in advance, for your help.

Solved
Best answer April 29, 2020

Best Answers
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Moderator

reimbursements

Welcome to the Community, cjmiller77.

 

I've got the steps on how to record business expenses with personal funds in QuickBooks Online. First, we'll need to record the business expenses/items you paid for with personal funds. 

 

Here's how:

 

  1. Go to the +New button and select Journal Entry.
  2. Select the expense account for the purchase on the first line.
  3. Enter the purchase amount in the Debits column.
  4. On the second line, select Partner's equity or Owner's equity.
  5. Enter the same purchase amount in the Credits column.
  6. Select Save and close.

Once done, we'll have to reimburse the money. We've got two options for this. We can either reimburse it via a Check or an Expense.

 

To record reimbursement as a  Check:

 

  1. Go to the + New button and select Check.
  2. Select a bank account used to reimburse the personal funds.
  3. In the Category column, select Partner's Equity or Owner's Equity.
  4. Enter the amount, and then, select Save and close.

To record the reimbursement as an Expense:

 

  1. Select + New and select Expense.
  2. Select a bank account to used to reimburse the personal funds.
  3. In the Category column, select Partner's Equity or Owner's Equity.
  4. Enter the amount of the reimbursement.
  5. Select Save and close.

I've added an article on how to handle business and personal funds in QBO for your reference: Mixing business and personal funds

 

 

You can always reach out to us if you need anything else.

View solution in original post

1 Comment
Highlighted
Moderator

reimbursements

Welcome to the Community, cjmiller77.

 

I've got the steps on how to record business expenses with personal funds in QuickBooks Online. First, we'll need to record the business expenses/items you paid for with personal funds. 

 

Here's how:

 

  1. Go to the +New button and select Journal Entry.
  2. Select the expense account for the purchase on the first line.
  3. Enter the purchase amount in the Debits column.
  4. On the second line, select Partner's equity or Owner's equity.
  5. Enter the same purchase amount in the Credits column.
  6. Select Save and close.

Once done, we'll have to reimburse the money. We've got two options for this. We can either reimburse it via a Check or an Expense.

 

To record reimbursement as a  Check:

 

  1. Go to the + New button and select Check.
  2. Select a bank account used to reimburse the personal funds.
  3. In the Category column, select Partner's Equity or Owner's Equity.
  4. Enter the amount, and then, select Save and close.

To record the reimbursement as an Expense:

 

  1. Select + New and select Expense.
  2. Select a bank account to used to reimburse the personal funds.
  3. In the Category column, select Partner's Equity or Owner's Equity.
  4. Enter the amount of the reimbursement.
  5. Select Save and close.

I've added an article on how to handle business and personal funds in QBO for your reference: Mixing business and personal funds

 

 

You can always reach out to us if you need anything else.

View solution in original post

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