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July 1, 2022
Question

How do I issue owner profit distributions?

  • July 1, 2022
  • 1 reply
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1 reply

katherinejoyceO
July 1, 2022

Great day, @mark-epicbikesho.

 

When a sole proprietor or partner in a partnership withdraws company funds for personal use, it is known as an owner's draw.

 

You'll need to set up an equity account in QuickBooks in order to track this. That way, when you pay yourself, the program can track the withdrawals of the company's funds. 

 

Here's how:

 

  1. Click the Gear icon at the top, and select Chart of Accounts.
  2. In the Chart of Accounts window, click New.
  3. From the Account Type drop-down list, choose Equity.
  4. Choose Owner’s Equity from the Detail Type drop-down list. 
  5. Enter an opening balance.
  6. Click Save and Close.

 

After that, write a check and record the payment using the owner's equity account:

 

  1. Click + New and select Check.
  2. Choose the bank account where your money will be withdrawn.
  3. Select Print later if you want to print the check.
  4. Fill in the check fields. In the Account field, be sure to select the Owner's equity account you created. 
  5. Click Save and Close

 

You can read this article: Set up and pay an owner's draw for more information on the specific stages.

 

Let me know if you have additional concerns. I'll be there to help you again.