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M
Mick6
February 5, 2020
Question

Record Expenses paid by shareholder as loan to be paid back later

  • February 5, 2020
  • 1 reply
  • 0 views

Hi, a shareholder paid some business expenses directly from their personal account. I'm wanting to record the expenses in quickbooks, however I dont want to pay the money back to the shareholder yet. I instead want it recorded in a shareholders loan (liability) to be paid back at a later date. 

 

Can someone walk me though how to do this? I'm new to quickbooks.

 

Thanks,

 

Michael

1 reply

paul72
paul72
February 7, 2020

Hi Michael.

 

While it was easier, in practice, for the shareholder to pay for the goods it would have been easier to account for had the shareholder paid money into the business & the business then used that money to pay for the goods.

This would have also avoided the potential for questions related to ownership, VAT, etc.

 

In QBO, I would try to make it as close to that case as possible.

I would create a dummy bank account in QBO to act as an intermediate account (I tend to use Contra Account for this sort of thing).

Receive a payment into Contra from Shareholder Loan account.

Enter the supplier bill as normal.

Use the newly created balance to pay the bill using Contra Account instead of the usual Bank Account.

 

This should leave you with a debt in Shareholder account, a zero balance in Contra & the goods accounted for correctly.

 

Hope that helps.

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