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WVU_doc
February 20, 2023
Question

Manually entering personally funded startup loan

  • February 20, 2023
  • 1 reply
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I opened a checking account with an online bank that does not link to Quickbooks. I am entering the transactions manually and have a question on how to enter the initial deposits that were from my personal account. After a couple months, I closed the account and took out the money plus the interest the account made. I guess you would call that a personal loan to start and then paid it back. How do I enter that I paid it back. Or am I making this more difficult that it needs to be?

1 reply

LieraMarie_A
LieraMarie_A
February 20, 2023

Hi there, @WVU_doc. I'll help you track the money deposited from your personal account and record the disbursement.

 

With QuickBooks Online, you can record personal money you use to pay bills or start your business. It's called capital investment. We use an equity account to track the investment. However, I still recommend asking your accountant for help to properly handle this situation. If you don't have one, you can visit the ProAdvisor site to run a search.

 

QuickBooks uses vendors to track what you, partners, or co-owners contribute to your business. To create your profile:

 

  1. Navigate to the Expenses menu and then Vendors.
  2. Select New Vendor.
  3. Fill out the form and select Save.

 

Then, follow these steps to set up an equity account:

 

  1. Go to the Gear icon, then select Chart of Accounts.
  2. Select New.
  3. From the Account Type dropdown, select Equity.
  4. From the Detail Type dropdown, choose Owner's Equity or Partner's Equity.
  5. Click Save and Close.

 

Once done, the instructions below will guide you on how to record the investment:

 

  1. Select + New and then Bank deposit.
  2. From the Account drop-down, select the bank account you're depositing the money into.
  3. Enter the Date you deposited the money.
  4. In the Add funds to this deposit section, select your name in the Received from field.
  5. Select the appropriate equity account from the drop-down list in the Account field.
  6. Specify a Payment method.
  7. Enter the investment amount in the Amount field.
  8. Select Save and close.

 

After that, you can either enter a check or expense to pay back the funds. If you use Expense, follow these steps:

 

  1. Click + New and then Expense.
  2. Select your name as payee.
  3. Choose the bank account.
  4. Enter the following information in the Category Details section.
    • First line: The equity account you use to track the investment in QuickBooks, and the amount you're paying back today.
    • Second Line: Expense account you use to track the interest you pay, and the amount of interest that is part of your payment today.
    • Other lines: Any additional fees and their appropriate accounts.
  5. Enter the amounts.
  6. Select Save and close.

 

Otherwise, if you're paying with an actual check, refer to this article: Capital Disbursement.

 

Additionally, you can enter a company loan from a company officer or owner. You need a liability account for this approach.

 

Feel free to reply below if you need further assistance with the process. We're always here to help. Have a wonderful day!

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