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ElizabethFL
September 12, 2023
Solved

How to log expenses paid by partners/owners to be paid later and attach to receipts

  • September 12, 2023
  • 2 replies
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Hi All! 

I co-own an LLC S-corp software start-up with 2 other partners. We each put in some capital to start the business and have a business checking account but have also each purchased things for the business on our own to go to a conference (airfare, booth pop-up, business cards, meals, etc.). In researching how to enter these expenses it seems there are multiple ways (either by creating a journal entry and treating each partner/owner as an employee, or by treating them as a partner and creating a partner contributions equity account, OR by creating an expense and then crediting it to the owner's investment account) to record these transactions.

 

My question is, which is the correct way to do this so that I can link these transactions to the receipts (should I even do this?), and so that I can create a check to pay back these expenses when we have the income in the future?

 

I'll attach a screenshot so you can see what I've done so far. If a journal entry is the right way, under 'Account' what do I put for the liability account? (FYI quickbooks staff if you see this your 'create a reimbursement account' link is broken.)

 

Thanks ahead of time!

Best answer by Kevin_C

Thanks for reaching out to us, @ElizabethFL. Let me help you record your initial business expenses in QuickBooks Online (QBO).

 

You can generate a journal entry to record the business expenses you paid with your personal funds. Let me show you how:

 

  1. Click the + New button and tap Journal Entry.
  2. On the first line, select the expense account for the purchase.
  3. Enter the purchase amount in the Debits column.
  4. On the second line, choose Partner's equity or Owner's equity.
  5. Enter the exact purchase amount in the Credits column.
  6. Select Save and close to proceed.

 

Then, record a check or expense when it's time to reimburse the money. Refer to this article for more details: Pay for business expenses with personal funds.

 

If you need other ways to record this entry, seek help from your accountant to ensure that your books are accurate. They'll be able to guide you in choosing the correct accounts.

 

Regarding your receipts, you can add them as attachments to the transactions you need to record.

 

Also, make sure to reconcile your accounts in QBO every month to confirm that they are balanced and accurate.

 

I'm always ready to assist if you need help configuring your business expenses in QBO. Just leave your replies here, and I'll reply as soon as possible. 

2 replies

K
Kevin_CAnswer
September 12, 2023

Thanks for reaching out to us, @ElizabethFL. Let me help you record your initial business expenses in QuickBooks Online (QBO).

 

You can generate a journal entry to record the business expenses you paid with your personal funds. Let me show you how:

 

  1. Click the + New button and tap Journal Entry.
  2. On the first line, select the expense account for the purchase.
  3. Enter the purchase amount in the Debits column.
  4. On the second line, choose Partner's equity or Owner's equity.
  5. Enter the exact purchase amount in the Credits column.
  6. Select Save and close to proceed.

 

Then, record a check or expense when it's time to reimburse the money. Refer to this article for more details: Pay for business expenses with personal funds.

 

If you need other ways to record this entry, seek help from your accountant to ensure that your books are accurate. They'll be able to guide you in choosing the correct accounts.

 

Regarding your receipts, you can add them as attachments to the transactions you need to record.

 

Also, make sure to reconcile your accounts in QBO every month to confirm that they are balanced and accurate.

 

I'm always ready to assist if you need help configuring your business expenses in QBO. Just leave your replies here, and I'll reply as soon as possible. 

    E
    ElizabethFLAuthor
    September 13, 2023

    Thank you Kevin!

    I had done it that way initially and then changed it. I have now reverted it so that it is correct per your guidance. I did save myself as a vendor and added that on the first line at the end. Should I leave that blank instead? There are three partners so I want to be able to differentiate WHICH partner's equity the associated expense is under. 

     

    If I understand you correctly I can attach the images of receipts to the journal entry by uploading them from my computer, but there doesn't seem to be a way to assign the already snapped receipts awaiting review to the entry. Is that right?

     

    I will discuss this with our accountant I just wanted to get it as well done as I can first! He will already be less than pleased we have used our own funds for business expenses, haha. 

    C
    ChristieAnn 11
    September 13, 2023

    I appreciate you performing the steps shared by my peer and coming back to the thread to ask for additional clarification, ElizabethFL. Let me provide further details to ensure you can record your entries efficiently.

     

    Since you want to be able to differentiate which partner's equity the associated expense is under, saving yourself as a vendor and adding that on the first line at the end of the journal entry is right. This is to make sure you can easily locate to whom the data is tied for.

     

    On the other hand, yes, you're right that you can attach the images of receipts to the JE by uploading them. However, there isn't an option to assign the already snapped receipts awaiting review to the entry. With this, you can delete the snapped entry and keep the journal entry for better tracking of your expenses.

     

    Here's how:

     

    1. Click the Banking menu.
    2. Go to the Receipts section.
    3. Choose a specific entry and click the drop-down arrow under the Action column. Then, select Delete.

     

    Lastly, refer to this article if you need steps on how to permanently delete a created journal entry in QBO: Reverse or delete a journal entry in QuickBooks Online.

     

    I'm always available at any time if you need further help with any QuickBooks-related concerns. Don't hesitate to click the Reply button below or post in the Community again, ElizabethFL. Take care!

      A
      angela2023
      November 8, 2023

      Hello,

       

      I have a similar situation. One of the partners paid for expenses back in 2021. The prior office manager entered a bill this year to account for the these expenses so we could pay him when the funds were available, but these are all hitting our current year's financials. 

       

      How can I record the expenses paid by the partner, but not itemize the accounts so our accounting is accurate for 2023?

       

      Thank you,

      Angela

      Candice C
      Candice C
      November 8, 2023

      Good morning, @angela2023. 

       

      I appreciate you stopping by on this thread. I can point you in the right direction to get this handled.  

       

      With the details you gave, I recommend consulting with your accountant to get the best answer to your question. They'll be able to give you some advice based on how your business is ran. 

       

      If you have any other questions or concerns, don't hesitate to ask. I'm only a post away. Have a great day! 

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