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brad-younge-hayl
November 14, 2023
Question

How should initial seed money from co-owners be setup in QB? Should I setup an Equity Account with 2 sub-accounts, 1 for each owner?

  • November 14, 2023
  • 1 reply
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I've got QB setup and integrated with 1 Bank Account.  There are 2 deposits in that Bank Account that are the initial funding from the owners in exchange for common shares of stock.  What's the correct way to set this up in QB (note: we'll be getting additional investments from Friends & Family in exchange for shares as well)?

1 reply

R
Rea_M
November 14, 2023

Yes, you're right, Brad. You should set up an equity account with sub-accounts to track co-owners investments in QuickBooks Online (QBO). I'll walk you through the process below.

 

We'll start by setting up each owner or partner as a vendor. QuickBooks uses them to track what you and they contribute to the business. Here's how:

 

  1. Go to Expenses and select Vendors.
  2. Select New vendor.
  3. Fill out the form and select Save.

 

After that, add one equity account (parent). Then, create sub-accounts for each owner. For the step-by-step guide, please see this article: Add an owner or partner to your books in QuickBooks Online.

 

Once everything is all set, record any investments contributed by your co-owners to the business.

 

Please keep in touch whenever you have other concerns about managing equity accounts and investments in QBO. I'll get back to you right away to assist you further. 

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