Have you used your own money to cover one or more business-related expenses? You aren’t alone. Countless business owners tap into their personal funds. When using your personal funds for business-related expenses, though, you’ll typically need to record the transactions as an owner’s reimbursement.
Once you’ve used your own money to pay for a business-related expense, you should reimburse yourself for the transaction. Reimbursement means transferring money from your business’s bank account to one of your own personal bank accounts. Of course, you’ll need to then record the reimbursement in your Quickbooks account. Doing so will ensure that your Quickbooks account recognizes the reimbursement. You can record an owner’s reimbursement in just a few simple steps.
Create a Journal Entry
To get started, you’ll need to create a journal entry for the transaction. In Quickbooks Online, you can create new journal entries by clicking the (+) sign at the top of the page and choosing “Journal Entry.” From here, enter an expense account, after which you can debit the total amount of the transaction in the first field. You can then choose “Owner’s Equity,” followed by entering the same amount from the previous field. When finished, click “Save and close” to finish the journal entry.
Record the Reimbursement
After creating a journal entry, you can now record the reimbursement. This is done by clicking the (+) sign once more and selecting “Expense.” You should now see an option to select your bank account. For this option, choose the bank account from which you were reimbursed for the transaction. When you reimburse yourself for a business-related expense, you’ll use a bank account that’s connected to your business. You should choose this bank account when recorded an owner’s reimbursement.
Upon selecting “Expense” and choosing your bank account, you’ll need to choose “Owner’s Equity.” Next, enter the amount of the transaction. You can complete the process by selecting “Save and close.” The owner’s reimbursement should now be recorded in your Quickbooks account.
An owner’s reimbursement is a transaction between your business bank account and your own personal bank account. When you use money from your personal bank account to pay for a business-related expense, you should reimburse yourself. This involves transferring money from your business’s bank account back into your personal bank account. If you use Quickbooks, you can record owner’s reimbursements such as this using the steps listed above.
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