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Providence_inc
April 2, 2019
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Hi ! Can anybody tell me how do I record owner's contributions to the business. should I use an equity account??

  • April 2, 2019
  • 3 replies
  • 0 views
Original commenter did not share additional details
Best answer by JonpriL

It's nice to see you here, @Providence_inc!

 

With QuickBooks, owner's contribution is recorded into your equity accounts. Let me help you accomplish this so you can record owner's contribution successfully.

 

@QBsguru is correct. In addition, here's how you can record owner's contribution:

  1. Go to Accounting.
  2. Select Chart of Accounts.
  3. Click New.
  4. Under Account Type, select Equity.
  5. Select Owner's Equity from the Detail Type field.
  6. Enter Owner's Contribution in the Name field.
  7. Type in the contribution amount in the Balance field.
  8. Click Save and close.

Once done, I'm confident you'll be able to record the owner's contribution into your account. In addition, I've also included our detailed guide in creating your new equity account.

 

However, I still recommend contacting your accountant. He/she will guide you in choosing the account specifications of this type of accounts.

 

Feel free to leave a comment below if you have any other questions about QuickBooks Online. I'll be always around to lend a hand.

3 replies

Q
QBsguru
April 2, 2019

That depends on the type of entity.  If the company is a partnership, LLC or single member LLC or sole prop then this is an owner contribution in the equity section.  If the company is an S or C-Corp, the answer would depend on whether the owner expects to be paid back.  If to be paid back, then this would show as a liability called Shareholder/Stockholder loan.  If not to be paid back, then it would be an account called Additional Paid in Capital (APIC) which is an equity account.

    D
    dg221
    December 14, 2020

    How do I record owners contribution if there are 3 partners.

    J
    JonpriLAnswer
    April 2, 2019

    It's nice to see you here, @Providence_inc!

     

    With QuickBooks, owner's contribution is recorded into your equity accounts. Let me help you accomplish this so you can record owner's contribution successfully.

     

    @QBsguru is correct. In addition, here's how you can record owner's contribution:

    1. Go to Accounting.
    2. Select Chart of Accounts.
    3. Click New.
    4. Under Account Type, select Equity.
    5. Select Owner's Equity from the Detail Type field.
    6. Enter Owner's Contribution in the Name field.
    7. Type in the contribution amount in the Balance field.
    8. Click Save and close.

    Once done, I'm confident you'll be able to record the owner's contribution into your account. In addition, I've also included our detailed guide in creating your new equity account.

     

    However, I still recommend contacting your accountant. He/she will guide you in choosing the account specifications of this type of accounts.

     

    Feel free to leave a comment below if you have any other questions about QuickBooks Online. I'll be always around to lend a hand.

      J
      J_R_F
      February 19, 2020

      In QB Desktop Pro 2019, when creating a new account for the purpose of owner contributions,  I do not see a Detail Type field referenced in step5.

      Could I have used an incorrect new account path?    Thanks.

      ---------------------------------

      1. Go to Accounting.    
      2. Select Chart of Accounts.
      3. Click New.
      4. Under Account Type, select Equity.
      5. Select Owner's Equity from the Detail Type field.
      6. Enter Owner's Contribution in the Name field.
      7. Type in the contribution amount in the Balance field.
      8. Click Save and close.
      M
      MadelynC
      February 20, 2020

      The resolution above is for QuickBooks Online, @J_R_F .

       

      You don't need to add detail type in QuickBooks Desktop Pro, you can add this or enter on the Account Name or Description.

       

      Let me show you how:

       

      1. Go to Chart of Accounts.
      2. Select Account then click New.
      3. Choose Equity as the account type.
      4. Click Continue.

      5. Enter the Owner’s Equity as the Account Name or Description.
      6. Select Save & Close.

       

      In case you need some information about organizing your QuickBooks account, you can visit this link: Help articles. You can click on each topic to view them.

       

      You’ve got me if you have an additional concern about QuickBooks.

      A
      accountingatheart
      March 30, 2022

      Hello I have a question:

       After creating the  "Owner's contribution"-under equity account. If the business owner made additional transactions paid by their personal money (Not business), How would I record that?

      1) do I just do journal entry for the totals for each month?

      2) upload from excel the total transaction to qbo online (kind of like petty cash)?

       

      Thanks

      Angelyn_T
      Angelyn_T
      March 30, 2022

      I appreciate you for joining the thread, @accountingatheart. I can share with you some insights about tracking business expenses paid by personal account.

       

      Once you had additional business transactions paid by personal money, you can use journal entries to record the entry. Here's how:

       

      1. Sign on to your QuickBooks Online (QBO) account.
      2. Go to the Gear icon, then click +New.
      3. Select Journal Entry.
      4. On the first line, select the expense account for the purchase.
      5. Enter the purchase amount in the Debits column.
      6. On the second line, select Partner's equity or Owner's equity.
      7. Enter the same purchase amount in the Credits column.
      8. Click on Save and close.

       

      When you decide to reimburse the amount, you can use a check or an expense transaction. I'm adding this link as your reference: Pay for business expenses with personal funds.

       

      In case you need help with recording capital investments to track money going into your business, open this article for more information: Record an owner's contribution or capital investment in your business.

       

      Let me know if you have any other follow-up questions while tracking your business expenses by adding a comment below. I'm just a post away to help. Keep safe!

      A
      accountingatheart
      March 30, 2022

      Thanks for replying back to me. From reading this I know I am doing the correct recording. Thanks for the clarification.

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