Payment of Owner's Expenses
How do I set up an account to reimburse owner for
I talk about how I like to setup my "Owed To Owner" account
in QuickBooks (QB) in my article titled Creating An Audit Trail
. Follow the link to find out what to do.
My personal preference is to use the credit card type of QB account rather than the current liability type of QB account.
Things to remember when recording "Owed To Owner" expenses:
- When setting up the owner in the name list, select Other as the type, not Vendor.
- Itemize each expense item to the respective account. Do not total and enter the expenses as one lump sum.
- When reimbursing the owner, make sure to code the cheque to the "Owed To Owner" account ... and the cheque should be payable to the owner ... not cash.
If the owner is making a loan to the company OR making an investment in the company (there is no expectation of being paid back), the transactions are just a bit different
than when reimbursing the owner for out-of-pocket expenses
Whenever possible, the owner should try to pay for business expenses using a business credit card or writing a cheque to the vendor from the business account. I talk about the reasons why in my article Creating An Audit Trail
I hope this answers your questions. If I haven't explained in enough detail how to setup the account, post back and I will walk you through screen by screen.