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ccslocksmith
January 18, 2024
Question

How to record a credit card payment that was made with personal funds

  • January 18, 2024
  • 1 reply
  • 0 views

So, my business was started last year. I have a business credit card, but the payments were made through my personal account before I established a business checking account. How do I record those payments, so they reflect correctly on my profit and loss.

I did make a "clearing account" but my concern with that is it leaves a negative balance in that made up account.  Is there a way to rectify that? Does it matter? Or is there a more correct way to solve this issue? 

1 reply

J
JuliaMikkaelaQ
January 18, 2024

Hello there, ccslocksmith. Let me guide you on how to record the payment in your Business checking account. 

 

Since you use your personal account to pay for your business expenses, you can reimburse it by recording a check or an expense in QuickBooks Online. First, you'll have to record the business expenses paid for with personal funds by creating a journal entry. You can also reach your accountant to help you with the task. Please refer to the steps below for your guidance:

 

  1. Click the +New button, then select Journal Entry.
  2. In the first line item, select the expense account for the purchase, then enter the amount in the Debits column.
  3. In the second line item, select Partner's Equity or Owner's Equity. You can also choose Personal Expense if the two options aren't available, then enter the same purchase amount in the Credits column.
  4. Select Save and Close.

 

Next, you can decide how you want to reimburse the money. 

 

Option 1: You can record the reimbursement as a check. Here's how:

 

  1. Click the +New button, then select Check.
  2. Select the bank account to use to reimburse the personal funds.
  3. Select the Partner's Equity, Owner's Equity, or Personal Expense account in the Category column.
  4. Enter the amount to reimburse.
  5. Select Save and Close.

 

Option 2: You can record the reimbursement as an expense. Here's how:

 

  1. Click the +New button, then select Expense.
  2. Select the Partner's Equity, Owner's Equity, or Personal Expense account in the Category column.
  3. Enter the amount to reimburse.
  4. Select Save and Close.

 

Once done, you may check your Profit and Loss report for the changes.

 

Furthermore, you can run other reports aside from the Profit and Loss to view other business information and finances. You can also customize them to make them personalized and fit your preferences. 

 

You can reach back to us if you need further assistance in recording payments to your checking account. Our team will always be here and willing to provide you with help and guidance. Have a great day ahead!

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