Purchasing Assets with Partner's personal funds

Hello 4Media,

I know it can be a bit tricky to record these kinds of transactions since there isn't a straight-forward feature you can click to do so. Don't worry, though, I can help you figure out how to take care of the assets purchased with the partner's funds.

I see you asked this question on a thread in our US Community, where a number of accountant and bookkeeping-savvy users are replying. Feel free to keep an eye on that thread as well, especially if you're using a US product yourself. While many features are the same between QuickBooks Online Canada and US, there are some key feature differences. There may be a feature in the US version that allows you to do what you need to do more simply or a method that others on that thread can outline for you that make sense with your QuickBooks version.

I've read through the additional details you posted on that thread and see you mention that this took place before a bank account was set up, meaning that there isn't a bank to choose for this transaction. In this case, you could maybe consider a cash on hand account instead, but I strongly recommend checking in with an accountant to make sure that you have the correct accounts and method for recording this.

As for recording the purchase and refunding it, the methods outlined in the Pay for business expenses with personal funds article may be of use to you. You say you're already familiar with Partner Equity for expenses, so you may have already come across this article. I'll go over it anyway, just to be sure.

With this method, you wouldn't have to worry about the lack of bank account since the steps have you focus on the Partner's Equity account and the expense accounts used. It's when it comes to recording the reimbursements that you'll have to consider the payment accounts. When it comes to entering the assets, the accountant would also be able to help learning how to enter them if needed, and you can also review the following article: Set up an asset account in QuickBooks Online

When it comes to working with an accountant and QuickBooks Online, I'll direct you to the My Accountant tab. There, you can invite someone you're working with via email to give them access to your account so they can help directly in your books. If you don't already have an accountant on your side, use the Find a pro to help link to review our database of QuickBooks-certified pros near you.

I hope this helps! Take care. :)

 Hello 4Media,

I would love the opportunity to go over my personal procedures with you when handling reimbursements such as this.

I myself add them as a Supplier/Vendor, I then create a bill for the purchase assigned to the individual we are reimbursing.  In this case, it will be your business partner.

For the line item, we will select the correct account as per usual, per line item. I do see in your response your examples were computers/furniture/microphones/headphones etc. My recommendation would be to have separate accounts created for such items.

Example:

1 for computer/computer equipment

1 for furniture

1 for minor computer equipment microphone/headphone etc.

We can then make use of the memo field to enter detailed notes of the transaction. My personal technique looks something like this:

Transaction ID # - ex: auth id, reference #, invoice #

Expense/Bill Payment

Name Of Who we are reimbursing - In this case your partner

Reason for reimbursement - ex: Purchases of computers for the business reimbursement bill payment

I would then upload the receipt or invoice in the attachment field to ensure the transaction is backed up in full in the case of an audit. We can now make a payment on this bill and issue a check for your partner. A good practice is to always upload the check stub in the attachment field for the payment portion of the bill once again, for that added backup security in the case of the audit.

Once the check has cleared we can then match the Banking Tab transaction to the manual issued check, and we are ready to have this transaction be a part of our future reconciliation!

I hope my personal technique works for your situation. Please note you can always reach out to your Personal Accountant to ensure they are ok with this method as well. I am also based out of Canada and work with a Canadian QuickBooks Online product. Thank you so much for reaching out in the community it was a pleasure adding my two cents for you!