If you’re trying to account for a business expense that was paid from your personal bank account, or if your business and personal expenses share a single bank account, we’ve got you covered.
To account for business expenses that were paid from a personal bank account:
- Upload the receipt for the expense to your Personal profile. Categorize it as you normally would, make the account your personal bank account, and click Verify. This will create an expense transaction in the Transactions page.
- Head over to the Transactions page and change the category of the created transaction to Owner Investment/Drawings
- Next, create a journal transaction that debits the appropriate expense account by the purchase amount before tax, debits the appropriate sales tax account by the amount of sales tax, and credits Owner Investment/Drawings by the total amount of the expense.
Depending on where you do business, you may not have to record recoverable taxes on purchases. If this is the case for your business, then the journal transaction above can be simplified to a two-line journal transaction that debits the appropriate expense account by the total amount of the purchase, and credits Owner Investment/Drawings by the same amount.
You’re done! The expense is now accounted for accurately and reflected in your personal and business profiles.
Now, if you have a single bank account for your personal and business transactions:
For any expenses in your business that you consider to be personal expenses, simply click on the grey arrow to the right of the transaction and select Move to Personal.
If you do not see the option to move to personal, then you can account for the expense using the instructions below:
- Change the category of the transaction in your business profile to Owner Investment/Drawings, leaving the account as is.
- Make a note of the transaction amount and head over to your Personal profile. Add a journal transaction that debits the appropriate expense account and credits Owner Investment/Drawings
You’re all set! The expenses will now be reflected on your books as personal,and not contribute to your business expenses
For screenshots and step-by-step guides, please click View original article below.