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mhcarey
December 13, 2021
Solved

Business expense paid with personal funds does not appear on profit and loss report

  • December 13, 2021
  • 2 replies
  • 0 views

I have a sole proprietorship. I made a business purchase using personal funds and entered it in QuickBooks as described in the help article Pay for business expenses with personal funds:

 

  1. Select + New.
  2. Select Journal entry.
  3. On the first line, select the expense account for the purchase.
  4. Enter the purchase amount in the Debits column.
  5. On the second line, select Partner's equity or Owner's equity.
  6. Enter the same purchase amount in the Credits column.
  7. Select Save and close.

 

However, when I run the profit and loss report, this expense is not listed, even though it was a business expense and should accordingly decrease my net profit.

Best answer by mhcarey

Hi Rainflurry,

 

I just realized that my expense was categorized as a fixed asset, which are different from normal expenses and so don't appear in the P&L. Just to test, I changed the category to a normal expense and I now see it in the P&L. Thank you for confirming that what I did was correct and should have been appearing in the report; you helped me find the issue!

2 replies

KlentB
KlentB
December 14, 2021

Hi there, mhcarey.

 

After entering the journal entry, you'll have to record the reimbursement through check or expense. This way, the transaction will show as business expenses in your financial reports. Feel free to follow the steps below.

 

Using a check transaction:

 

  1. Click the + New button.
  2. Choose Check. 
  3. Select a bank account to use to reimburse the personal funds.
  4. In the Category column, select partner's equity or owner's equity.
  5. Enter the amount to reimburse.
  6. Click Save and close.

Using an expense transaction:

 

  1. Click the + New button.
  2. Choose Expense
  3. Select a bank account to use to reimburse the personal funds.
  4. In the Category column, select partner's equity or owner's equity.
  5. Enter the amount of the reimbursement.
  6. Select Save and close.

I'm also adding this article to help manage your personal and business expenditures in QuickBooks Online: Mixing business and personal funds.

 

You can always fund me here if you have any other concerns or follow-up questions. Have a great rest of the day.

M
mhcareyAuthor
December 14, 2021

Hi KlentB,

 

Thanks for your reply, but I don't want to reimburse my personal account. When I first started the business, I didn't have a separate business bank account, so I paid for many expenses out of my personal accounts. These expenses were almost a year ago, and I have no interest in transferring money back to my personal account now (nor do I have enough in the business account to cover all the prior expenses).

 

There must be a way to do this without reimbursement. This is a sole proprietorship so there is no legal requirement for me to move money back to my personal account.

S
SarahannC
December 14, 2021

Hello there, @mhcarey.

 

Thanks for getting back to us and providing additional details when you first started your business.
 

Since you used personal funds, it'll not show as your business expense. This only shows up when recording a reimbursement through check or expense as advised by my colleague KlentB above. 

 

Since you don't want and need to reimburse your personal funds, It would be best to consult an accountant for this matter. An accountant can help and provide you with alternative ways on tracking these funds. This way, they'll show up correctly in your Profit and Loss report.
 

If you're still looking for an accountant,  you can go to our ProAdvisor Page. From there, you can follow these steps:

 

  1. Pick an option of what expertise you need to find.
    • Accounting & Bookkeeping.
    • Tax & Financial Planning
    • QuickBooks Setup & Consultation.
  2. Enter your city or zip code, then hit Search.

 

You'll want to get more information about the Journal Entry feature in QBO:

 

 

Know that we're always here to assist you more. Just let us know anytime by commenting below. Take care always, mhcarey.

Rainflurry
Rainflurry
December 14, 2021

The way you did it is fine and that expense should show up on your P&L. Is it possible that the date of the journal entry is outside the date range of the P&L report? 

    M
    mhcareyAuthorAnswer
    December 14, 2021

    Hi Rainflurry,

     

    I just realized that my expense was categorized as a fixed asset, which are different from normal expenses and so don't appear in the P&L. Just to test, I changed the category to a normal expense and I now see it in the P&L. Thank you for confirming that what I did was correct and should have been appearing in the report; you helped me find the issue!

    C
    ChristieAnn 11
    December 14, 2021

    Hi there, Rainflurry.

     

    Thank you for coming back to the QuickBooks Community and I appreciate you for providing further details to help address the concern from another user above. With your matter, I'll ensure to share information on how transaction's date works in QuickBooks.

     

    Yes, you can create a date of the journal entry that is outside the date range of the P&L report. However, the entry will not appear in the profit and loss. That said, you'll have to select the date of the journal entry within the P&L report period to ensure that this will show on the said report.

     

    Additionally, you can open this article to view details on how you can customize reports to focus on the information or data that you want to see: Customize reports in QuickBooks Online.

     

    Lastly, you may refer to this article on how to memorize a report that allows you to save it with its current customization settings: Memorize reports in QuickBooks Online.

     

    Keep in touch with me here should you need any additional assistance, I'm always around to lend a hand. Thanks for coming to the Community, wishing you and your business only the best.

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