Hello. How can I pay out money to the investor of my business? I mean what account can I choose to reflect this transaction?

thegreyiam · ‎September 14, 2020

MJoy_D · ‎September 14, 2020

I can guide you on how to record the payment you’ve made to your investors, @thegreyiam.

You can record the amount you’ve paid after recording those capital investments. You can write a cheque or create an expense.

You can have the equity account that you use when you track those investments and the expense account that you use to track the interest you pay. It will also be best to consult an accountant to make sure it's recorded correctly.

If you're going to pay that investor a paper cheque, you can follow the steps that I'll be providing below:

Go to the + New button and select Cheque.
Look for the person or business you’re paying back from the Payee drop-down,
For the Cheque no. enter a cheque number.
In the Category details section, you can add the equity account in the first line and expense account on the second line.
Select Save and close.

If you're going to pay them with a debit or credit card, you can record them by entering an expense.

Here’s a reference on how to track personal money or investments to your business and on how to record paying back an investment.

If you require any further information in recording your transactions, let me know. I'm always glad to help in any way I can. Have a wonderful day!

View solution in original post

MJoy_D · ‎September 14, 2020

I can guide you on how to record the payment you’ve made to your investors, @thegreyiam.

You can record the amount you’ve paid after recording those capital investments. You can write a cheque or create an expense.

You can have the equity account that you use when you track those investments and the expense account that you use to track the interest you pay. It will also be best to consult an accountant to make sure it's recorded correctly.

If you're going to pay that investor a paper cheque, you can follow the steps that I'll be providing below:

Go to the + New button and select Cheque.
Look for the person or business you’re paying back from the Payee drop-down,
For the Cheque no. enter a cheque number.
In the Category details section, you can add the equity account in the first line and expense account on the second line.
Select Save and close.

If you're going to pay them with a debit or credit card, you can record them by entering an expense.

Here’s a reference on how to track personal money or investments to your business and on how to record paying back an investment.

If you require any further information in recording your transactions, let me know. I'm always glad to help in any way I can. Have a wonderful day!

thegreyiam · ‎September 25, 2020

thanks for an answer.

Still I am having an issue with this transaction.

Let me tell you.

When I started using QB, I already had money in my business so when I created QB I just entered the amount I already had in my business without saying if it was an investment or not. So now QB shows not accurate Net Earnings starting from 01.01.2020.
Now when I want to pay back to my investor and it is more money than QB shows as Net earnings according to QB records. So I will have negative Net Earnings when I will pay back to the investor. But in fact it will not be true.
I hope I made myself clear

ChristieAnn · ‎September 25, 2020

Hi there, thegreyiam.

Thank you for coming back and for providing additional information.

However, may I ask what account did you use to record the entries? This way, we're able to verify why QuickBooks shows not accurate Net Earnings in the system. That said, QuickBooks depends on how you entered the transactions or how you record this.

I'd also recommend consulting an accountant to guide you with the correct account and how to properly record the transactions in QuickBooks.

Please refer to this article on how you can set up an equity account, record the investment to pay back the funds from the investment: Track personal money or investments to your business.

You can also check this article on how to view your Retained Earnings in the Balance Sheet: How to view your Retained Earnings account.

Don't hesitate to leave a comment on this thread if you have other questions or concerns. I'm always here to help.