Partnership Guaranteed Payments

It's nice to have you here in the QuickBooks Community, ntesllc. I'll share information about recording partnership-guaranteed payments in QuickBooks.

Automating partner payments is not possible when establishing direct deposit payroll. As a result, you must create a manual check for your partners and deposit it into an expense account.

You can go to your Chart of Accounts and add the new expense categories from there. Below are the steps to complete the process:

1. Sign in to your QuickBooks Online (QBO) account.
2. Click Accounting in the left panel and choose Chart of Accounts.
3. Select New.
4. Choose a Category/Account type (Expenses or Other Expenses) and name it as Guaranteed Payments.
5. Fill in the needed details and hit Save & Close once done.

Then, you can create a check. Here's how:

1. Go to + New, then select Check.
2. From the Payee ▼ dropdown, select who you want to address the check to.
3. From the Bank Account ▼ ( choose Guaranteed Payments )
4. Fill out the rest of the fields accordingly.
5. Select Save and Close.

For more details, see this article: Create and record checks in QuickBooks Online.

However, if you want to pay your partner using direct deposit, you can set them up as a contractor. This way, the payment method you'll be using is direct deposit. For more details, see this link: Pay a contractor with direct deposit.

Upon sharing the steps above, I'd still suggest consulting your accountant. They can provide expert advice on how to set up the deduction for your partner to ensure your books will be accurate.

If you'd like to record capital investments to track money going into your business, you may open this article: Record an owner's contribution or capital investment in your business.

If you need assistance with partnership-guaranteed payments or anything else, please visit us again anytime. We are always here to help you.