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Tawnya Sutherland

Quickbooks bill paying

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Ok, I have some bills I want to enter in Quickbooks (just started using this for my business and am now entering all my expenses for 2004).

 

I have already paid for these expenses out of pocket. How do I enter into Quickbooks properly so that I get reimbursed from biz bank account? I actually have a liability account called "Owners Investment (liability)" which has an opening balance of things I need reimbursed for already and want to credit this somehow or write a lump cheque to myself.

 

How does one enter a bill from a specific vendor so it can be showed as an expense for reimbursement yet keep the vendor name on the bill? Or, do I just put my name in as the vendor? I would rather put vendor's name in, ie) Telus for example so I can keep track.

 

How I detest bookkeeping but know it has to be done.

 

Help greatly appreciated here....thanks!

 

Tawnya

 

yuk.gifyuk.gifyuk.gif

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HI Tawnya,

We started using Quickbooks last year for my fiance' business and I love it!!! We actually had the same problem as you, as we bought it in August. So what we did was enter all the income into the system, then enter all the expenses in and just do a direct payment, then after you are all done there will obviously be more money or less money whatever, what we do is just write a cheque to James (my fiance) for his owners draw which will then put the bank into balance of where it should be...

This is what worked best for us and was the easiest...

HTH

Pam smile.gif

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As far as I know... if you are a sole proprietor whatever income the business has is what you have as income.... so if you take a draw it needs to be recorded and it is recorded as owners equity not as an expense...

this is the way we do it and were told is the easiest way to record his draw and expenses... because even though you are writing a cheque its all you anyway doesnt really matter where it goes... right ... so as long as its not recorded as an expense and is recorded as owners equity it should be a ok.

(Im pretty sure! wink.gif )

 

Pam

 

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Hi Tawyna,

 

If you have already paid for the expenses out of your pocket, do a general journal entry which increases your owner's equity (because it is money that you have put into the business). If you want to be reimbursed then you would take a draw which would decrease your owner's equity. And all would balance. Doing it this way would not show that a specific bill from a specific vendor had been paid. However, you can add this information to the journal when doing the entry for future reference.

 

Another way that you could keep track of which bills were paid when you do your transactions this way is to create sub-accounts of the Owner's Equity account (ie: create a sub-account for Telus, etc). Then, when you increase your owner's equity because you have paid for a bill out of your own pocket, make sure that you apply this to the subaccount rather than directly to the Owner's Equity account. Doing it this way will help you keep track of all the expenses, and what they are for, that you have paid from your own pocket. Also, when you go to reimburse yourself for the expense, you can do the transaction against the sub-account rather than the general Owner's Equity account, and you will be able to keep track of which expenses the business has reimbursed you for.

 

In the example that you have given, you wouldn't want to put the vendor's name into the bill. Because you have already taken care of that bill, the vendor is, in essense, eliminated from the equation. Any further transaction would be between you and your business. Doing things the second way I suggested above is probably the best way for your circumstances.

 

Hope this helps!

 

Lori

smile.gif

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Lori,

 

I am braindead here today but determined to wrap my head around this. Is the Owner's Equity account an asset/liability? What type do I choose in Quickbooks, plus what tax line would I assign it?

 

Thanks

Tawnya

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so if you take a draw it needs to be recorded and it is recorded as owners equity not as an expense...

I understand about draws, but this is not a draw, it is a reimbursement of expenses for the business.

 

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Wait Tawyna, I just re-read your message. If you already having an opening equity that includes things that you paid for, there should be expenses already accounted for...

 

I'm afraid I'd have to take a quick look at what you are doing to tell you the way to correct what you need to. You can IM me if you'd like (just go to my website under Contact Us) or email me.

 

You've certainly helped me enough, I don't mind returning the favor.

 

 

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Actually, I deleted the owner's equity (it was for 2003 expenses), setback my startup date to 2003 and I am now entering any expenses I paid as you stated above. This way, I think the paper trail is better. A bit more work but at least I can see monthly what I paid and to who. Then, when I want to be reimbursed, I just write a cheque to myself.

 

So here is what I'm doing, please tell me if this is correct:

 

(To record expense)

Under Owner's Investment register:

- I put in Vendor name ie) Telus ADSL for $35

- then choose expense account (Internet Fees)

- Click Record

 

This raises my "Owner's Investment" account to $35 (which is what company owes me)

 

THEN: (to be reimbursed)

 

Under chequing register:

- Put my name as Payee with $35 as amount

- account I choose is Owner's Investment

- Click record

 

It appears to work and balance with my over income/expenses, is this the way then?

 

Thanks,

Tawnya

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For any money you take out, when you write a check to yourself, record it under Owner's DRAW. You want to keep that separate that way you can see your total investments vs your total draws.

 

I know that sounds weird, but it's the way it's done.

 

You can call me if you have specific questions too, my number is on my website.

Edited by CandyBeauchamp

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That's how I would do it Tawnya.

 

As we discussed before it is a two step process, but taking into consideration that you want to track the expense to a particular vendor doing the manual register entry is the best way to go. I have had to make similar entries using my "Due to Shareholder" and "Due from Shareholder" accounts.

 

Looks good to me thumbup.gif

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Thats the way we do it as well... is through Owners Draw - just write a cheque to yourself and choose the account name Owners Draw... it is an excellent program and has alot of great ways to do bookkeeping etc...

Best of luck! biggrin.gif

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One concern with the way you do it Pam is if you write a cheque from your Owner's Draw for direct expenses is that you will have to claim this as income whereas it was actually an expense.

 

When I take a salary, yes it comes from Owner's Draw, but when I am being reimbursed, it does not as stated above else I will have to pay income tax on these expenses.

 

Tawnya

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