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kris10bake
April 14, 2025
Question

How to categorize personal loan repayments

  • April 14, 2025
  • 1 reply
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My personal checking account is the only account that my business expenses/transactions flow through. My son makes regular repayments of a personal loan I gave him to me through Zelle. How do I categorize these "deposits" since they are NOT business revenue or income? How to keep them off the P&L report?

1 reply

Rainflurry
Rainflurry
April 14, 2025

@kris10bake 

 

With all due respect, I'm sure you're aware of this, but not having a business account is making things way harder than they need to be, and your books are going to be a mess.  The reason for this is that every personal bank transaction that is recorded in QB requires an offset (reason) account.  The more entries you make, the more difficult it's going to be to unwind this mixing of personal and business transactions.  Also, if you're an LLC or corporation, mixing your funds is a sure way to lose the liability protection that your LLC/corporation was intended to provide.  Open a business account, link it to QB, and leave all of this personal stuff out of your business books.

 

In the meantime, you can assign the loan payments to Owner's Equity.  Make sure to reduce Owner's Equity when you take the cash off your balance sheet when you get your business bank account set up.  

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