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B
bpetryak-gmail-c
March 7, 2024
Question

Owner Paid Invocies w/ Credit Card but will not be reimbursed

  • March 7, 2024
  • 2 replies
  • 0 views

One of our company's owners paid some outstanding vendor invoices with a personal credit card, but rather than being reimbursed, wants the amount (about 11K) to be counted toward the total of an owner contribution to the business. The total being paid to the business by the owner is 37k, the total of the invoices paid via his credit card was 11k, so the check that was written by the owner to the business was the difference of 26k (our bank is connected to QB, so this amount was allocated to the owner's Equity account from the bank feed) I'm wondering how best to record/reflect the payment made to the vendor via the credit card, since it did not come directly out of any of the business funds.  

2 replies

R
Rasa-LilaM
March 8, 2024

Thank you for the detailed information regarding your concern, bpetryak.

 

Keeping track of entries is crucial for maintaining organized books and a smooth reconciliation process. We'll have to create a journal entry using the purchase account and Owner's equity to record the payment made with a personal credit card. Allow me to help and navigate through the process.

 

To start, let's create a journal entry. If you haven’t added the account, click on this link for the complete instructions. After setting up the account, simply follow these steps to track the transaction:

 

  1. Tap the New menu and pick Journal entry under Other.
  2. On the first line, choose the expense account for the purchase and type the amount in the Debits column.
  3. Go to the second line and select Partner's equity or Owner's equity.
  4. Then, key in the same amount in the Credits column.
  5. Press Save and close to keep the changes.

You can take a look at this article to learn more about the process: Pay for business expenses with personal funds.

 

I've collected resources on managing personal and business expenses. Find out how to handle transactions from bank accounts, credit cards, and owner's funds by checking the links provided for detailed instructions:

If you have any more questions or concerns regarding tracking transactions made with your personal credit card account, please drop a comment below. I'll be sure to respond and make sure you're supported. Have a great rest of the day, bpetryak.

B
bpetryak-gmail-cAuthor
March 8, 2024

Thanks for the response. To be clear, the total contribution of 37k that the owner is making is comprised of a check written to the business for 26k, and the vendor payment with personal cc of 11k. Only that check has been allocated to the owner's equity account, because it was done so through the bank feed after the check was deposited. In order to do as you're describing below, I would have to first make another entry into the equity account for the amount of 11k, correct? Even though no payment of 11k was received by the business, it is essentially the owner's contribution of it that goes to pay the vendor, it's just that the money wasn't received into the equity account first...

Rainflurry
Rainflurry
March 8, 2024

@bpetryak-gmail-c 

 

For the $11K in bills, create a bank account in QB called 'Clearing Account' and use that account to pay the bills.  Then, make a transfer (New > Transfer) and transfer the $11K from the Clearing Account to the owner's equity account.  The bills are now paid, the Clearing Account is $0, and the owner's equity has increased $11K.  

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