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schulz36
September 21, 2022
Question

Bills paid by personal means

  • September 21, 2022
  • 1 reply
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We have a new multi-member LLC.  One member is backing the expenses on run up.  He is making payments via personal credit card, personal wire or venmo.  He does not want to get back, but show the running total of what he has put in and record the company expenses paid.  I have set up vendors of expenses he has paid and entered bills for each, charging the appropriate expense.  How do I handle paying and recording his investment.  There will be a lot of this going forward, so the most streamlined way is best.

 

Thanks Dan

1 reply

Rainflurry
Rainflurry
September 22, 2022

@schulz36 

 

I presume this is an LLC taxed as a partnership.  If that's the case and you haven't already, create separate equity accounts for each partner.  Then, set up a bank account called "Clearing Account".  When you pay the bills, use the Clearing Account as the payment account.  Then create a journal entry to zero out the clearing account and move that amount to the paying partner's equity account like this:

 

 DebitCredit
Clearing AccountXXX 
      Partner Equity - Partner A XXX

 

It would be nice if you could just pay a bill in QBO using an equity account, but you can't.  Doing it this way will keep the bill under the vendor and in A/P until paid by the partner.

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