If we received payment from an investor and they deducted expenses we agreed up upon, do I have to record the expenses in our records?

Yes, tobey1. You should record the expenses deducted by the investor in your records within QuickBooks Online (QBO). Allow me to explain this further to you.

Even though the expenses were deducted before you received the payment, they still represent costs associated with your business operations. Accurately tracking these expenses is important for maintaining financial transparency and understanding your company's financial health.

You need to create an expense for the specific item you agreed upon, however, you need to set up your investor as a vendor first in QBO. 

Here's how:

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

After that, navigate to the Expense tab in QBO and create a new expense transaction.

1. Select + New. Then select Expense.
2. Fill in the details of the expenses, including the date, payee (the investor), account category (e.g., office expenses, professional fees, etc.), and the amount deducted.
3. In the Payment method field, select how you paid for the expense.
4. In the Category details section, enter the expense info. In the Category dropdown, select the expense account you use to track expense transactions. 
5. Enter the Amount and Tax.
6. When you're done, select Save and Close.

Additionally, when making a bank deposit for the payment received from investors, it's important to link the created expense with the deposit to properly associate it.

By recording these expenses in QBO, you'll have a complete and accurate picture of your business's financial transactions, which is essential for budgeting, tax preparation, and overall financial management. Keep me posted by adding a comment below.