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Experienced Member

Recording start-up payments made from personal bank accounts

Hey everyone, I'm kind of stuck and hoping for some expert guidance!
My start up required two substantial stage payments for web and animation services before I had got the business bank account set up, so to expedite things I paid for them from my private bank account.
I'm just setting up QB and need to record these payments.  Any advice on options to do this in a way that makes sense accounting-wise?  
I'm a newbie, so would appreciate a step by step guide too if poss! Smiley Happy
Thanks in advance
Paul

Solved
Best answer 04-11-2018

Accepted Solutions
Moderator

Re: Recording start-up payments made from personal bank accounts

Good thing you drop by the QB Community, Paul.

 

Let me help you record the transaction and get you back on track.

 

We'll record a journal entry for the paid business expenses. Then, create a cheque to reimburse your own bank account. We can use the Owner's Equity account to represent your personal bank account.

 

Let me show you how to create the journal entry:

 

1. At the top, click the Create (+) menu and select Journal Entry.

2. Enter the Journal date and the Journal no..

3. Debit the expense account.

4. Credit the Owner's Equity account. Make sure the amount are the same.

5. Click Save or Save and close.

 

Now, let's reimburse your own bank account (Owner's Equity) through Cheque:

 

1. At the top, click the Create (+) menu and select Cheque.

2. Enter the business bank account in the Bank Account field.

3. You can choose a payee or leave it blank. Then, go to the Account details section.

4. Under the ACCOUNT column, enter the Owner's Equity account.

5. Under the AMOUNT column, enter the reimbursement amount.

6. Click Save or Save and close.

 

You can use this article for your reference: Paying For Business Expenses with Personal Funds.

 

I'd also recommend checking this with your accountant to see what works best for you and your books.

 

Feel free to post your concerns in QB Community, and we'll be glad to answer them for you.

10 REPLIES 10
Moderator

Re: Recording start-up payments made from personal bank accounts

Good thing you drop by the QB Community, Paul.

 

Let me help you record the transaction and get you back on track.

 

We'll record a journal entry for the paid business expenses. Then, create a cheque to reimburse your own bank account. We can use the Owner's Equity account to represent your personal bank account.

 

Let me show you how to create the journal entry:

 

1. At the top, click the Create (+) menu and select Journal Entry.

2. Enter the Journal date and the Journal no..

3. Debit the expense account.

4. Credit the Owner's Equity account. Make sure the amount are the same.

5. Click Save or Save and close.

 

Now, let's reimburse your own bank account (Owner's Equity) through Cheque:

 

1. At the top, click the Create (+) menu and select Cheque.

2. Enter the business bank account in the Bank Account field.

3. You can choose a payee or leave it blank. Then, go to the Account details section.

4. Under the ACCOUNT column, enter the Owner's Equity account.

5. Under the AMOUNT column, enter the reimbursement amount.

6. Click Save or Save and close.

 

You can use this article for your reference: Paying For Business Expenses with Personal Funds.

 

I'd also recommend checking this with your accountant to see what works best for you and your books.

 

Feel free to post your concerns in QB Community, and we'll be glad to answer them for you.

Community Contributor **

Re: Recording start-up payments made from personal bank accounts

Hi, interesting to see this Q & A. I'm using QBSE and set up my business only last week. In the preceeding 12 months I bought £1,500 worth of necessary office equipment. I'm frankly still confused as to how to record this spending as setup expenses. If only QBSE had a setup costs section.

 

Please help! Thanks.

Experienced Member

Re: Recording start-up payments made from personal bank accounts

Hi Ali

The good folks at QB sent me this reply today:

Re: Recording start-up payments made from personal bank accounts

Good thing you drop by here in the QB Community, Paul.

 

Let me help you record the transaction and get you back on track.

 

We'll record a journal entry for the paid business expenses. Then, create a cheque to reimburse your own bank account. We can use the Owner's Equity account to represent your personal bank account.

 

Let me show you how to create the journal entry:

 

  1. At the top, click the Create (+) menu and select Journal Entry.
  2. Enter the Journal date and the Journal no..
  3. Debit the expense account.
  4. Credit the Owner's Equity account. Make sure the amount are the same.
  5. Click Save or Save and close.

 

Now, let's reimburse your own bank account (Owner's Equity) through Cheque:

 

  1. At the top, click the Create (+) menu and select Cheque.
  2. Enter the business bank account in the Bank Account field.
  3. You can choose a payee or leave it blank. Then, go to the Account details section.
  4. Under the ACCOUNT column, enter the Owner's Equity account.
  5. Under the AMOUNT column, enter the reimbursement amount.
  6. Click Save or Save and close.

 

You can use this article for your reference: Paying For Business Expenses with Personal Funds.

 

I'd also recommend checking this with your accountant to see what works best for you and your books.

 

Feel free to post your concerns in QB Community, and we'll be glad to answer them for you.

I hope that helps!

Good luck with your new venture Smiley Happy

Paul

Community Contributor **

Re: Recording start-up payments made from personal bank accounts

Thanks Paul, I'll be honest with you, that response from QB's James went straight over my head. Very confusing. I can't even see a 'Create' button in the QuickBooks Self-Emplyment app I'm using here in the UK.

 

I really don't know how to add my setup costs. Totally confused!

 

Ali.

Community Contributor **

Re: Recording start-up payments made from personal bank accounts

The reply helps Paul which is great.

 

...but it doesn't help me! James, can you please respond to my question?

Experienced Member

Re: Recording start-up payments made from personal bank accounts

Hi Ali

I'm here in the UK too, and the answer from the US has given me enough to resolve my issue (I think!).
I use QB Online for my Ltd Company start up, and  that's what I'm having the issue on, but I use QBSE for my independent business.  
I'm hoping to resolve my issue today on QB Online, and then I'll take a look at SE to see if I can give you any guidance.
In the meantime - it might be worth making a post about your issue, clarifying that you're in the UK, and usiing QBSE Smiley Happy
I'll be back on to comment when I've had a look.
Cheers
Paul

Community Contributor **

Re: Recording start-up payments made from personal bank accounts

Thanks Paul, I've already done what you suggested and made it clear that I'm in QBSE UK. No response as yet.

 

I appreciate your feedback and will be interested to learn what you discover about QBSE in relation to this issue. I suspect the app you use for your limited company has more options and has the links relevant to James' response e.g. 'Create', 'Jounal Entry' etc. He's yet to respond to me.

 

The emails I've had from QuickBooks suggest it isn't UK staff responding. Perhaps they have no staff here in the UK. The language is often unclear and I suspect they don't fully understand our tax system here.

 

Ali.

Experienced Member

Re: Recording start-up payments made from personal bank accounts

HI Ali

The business laws and tax rules will be different in the US, and there's also a language filter!
The good news for you is that the SE version is much more simple!
I'll get back to you asap.
P

Community Contributor **

Re: Recording start-up payments made from personal bank accounts

Brilliant stuff Paul, thank you. My businsess is portrait painting by the way. I was a graphic designer for 23 years previously.

 

lamp black portraits, find me on Facebook.

 

Ali.

Moderator

Re: Recording start-up payments made from personal bank accounts

Hi Ali,

 

We can calculate the depreciation manually and record them as an expense every month. Though, having an option that automatically tracks asset depreciation in QuickBooks Self-employed can be useful.

 

You can check out this thread how to record assets in QuickBooks Self-Employed: https://community.intuit.com/questions/1711255.

 

Please don't hesitate to let us know if you need anything else.