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cphoughton
July 23, 2023
Question

Question about negative cash account

  • July 23, 2023
  • 1 reply
  • 0 views

Hi everyone. 

 

I have several business accounts linked in Quickbooks. But back when I was starting my company, I paid for some things with personal accounts. I did not want to link those accounts to Quickbooks, because I no longer use them for business. However, when categorizing expenses, I had to choose an account that I used for the expense. I categorized it as coming from Cash to keep a tally of what money I was spending before I had business accounts. I would have liked to include that in my owner's investment, but that is not a viable option when categorizing expenses because it's not a bank. I now show a negative balance on my Cash account and I am not sure where to go from here. 

 

Thank you

1 reply

C
CharleneMaeF
July 23, 2023

I'm here to help you handle the expense transactions paid using your own account, cphoughton.

 

While it is generally advised to keep business and personal funds separate, we know it happens sometimes. In QuickBooks Online, the best way to enter the business expense you paid for with your personal funds is using a journal entry. This way, we can debit or pay using the Owner's Investment or Equity account.

 

Here's how:

 

  1. Go to + New and then click Journal Entry.
  2. On the first line, select the expense account for the purchase.
  3. Enter the purchase amount in the Debits column.
  4. On the second line, choose either the Partner's equity or the Owner's equity.
  5. Enter the same purchase amount in the Credits column.
  6. Click Save and close.

 

 After that, there are two ways how to reimburse the money. You can head to Step 2 in this article to learn how: Pay for Business Expenses with Personal Funds.

 

Also, it is recommended to consult an accountant to guide the entire process and ensure the correct account is linked to the transaction.

 

Additionally, I've added these articles that'll help you automatically categorise transactions from your bank: Set up Bank Rules to Match Bank Data in QuickBooks Online. It'll help you speed up the review process.

 

Please keep us posted if you need additional assistance managing your bank transactions. Our team is always available and ready to assist you in ensuring the accuracy of your books.

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