When someone makes a purchase for your business using their personal funds, your business has received a short-term loan from that person. This means the money you owe them is a reimbursement.
Learn how to account for reimbursements with a video.
Create a liability account
To record the reimbursement, create a liability account under Other Short-term Liability in your chart of accounts. Learn how to add a new account or category.
Enter an expense transaction
First, create an expense transaction:
- On the left-side menu, click Transactions.
- At the top right, click Add transaction > Add withdrawal.
- Enter the date of the purchase, a description, and the amount.
- For the Account, select the liability account you created.
- For the Category, select the relevant expense category.
- Add sales tax, if applicable.
- Click Save.
The amount to be reimbursed will appear on your balance sheet in your reimbursement account.
Bookkeep the repayment
Once you have repaid the funds, categorize the bank-imported transaction or create a new transaction to show the repayment.
If you import transactions, categorize the repayment to the liability account you created..
To create the reimbursement transaction:
- On the left-side menu, click Transactions.
- At the top right, click Add transaction > Add withdrawal.
- Enter the date of the reimbursement, a description, and the amount reimbursed.
- For the Account, select the account used to pay the reimbursement.
- For the Category, select your reimbursement account.
- Click Save.