how to enter personal expenses in quickbooks online

#How to enter personal expenses in quickbooks online how to#

Once you see a list of transactions, review each transaction to determine if any are actually personal expenses.įor example: If you look through your list of Travel Expenses in QBO and you find a $1000 expense with the vendor name Disney World, which you recognize as a personal trip, then you will need to re-categorize that transaction to Owner’s Draw. For our example, let’s use Travel Expense. For each expense account, select the balance to see all of the transactions which were categorized to that account for the selected time period.This situation can be very tricky, because you will have to go through all of your transactions and determine which were actually personal expenses. Sometimes, you may have already recorded personal expenses as business expenses in QBO. What if you have personal expenses accidentally recorded as business expenses? Under Detail Type, select Personal Expense.Since you used your business bank account to pay for a trip to Disney World, you are essentially withdrawing money from your owner’s equity, and then using that money to pay for personal leisure.īefore you start re-categorizing personal expenses, make sure that you have Owner’s Draw account set up in your Chart of Accounts These owner’s draws are considered to be a reduction of the owner’s equity, not an expense to the business.

Owner’s draw is the money that the business owner takes out of the company for personal use. You can do this by categorizing the expense to Owner’s Draw. Since it’s a personal expense, you need to isolate it so that it does not show up on your business’ Profit and Loss report. For example: you see a $1,000 expense for Disney World and you recognize that this expense was for a personal family trip.

#How to enter personal expenses in quickbooks online how to#

How to correctly record personal expenses to QuickBooks OnlineĪs you go through the list of transactions in the For Review tab, look for transactions which stand out as personal expenses.

Now that we’ve cleaned up this mess, I’ll show you how to correctly add personal expenses to QuickBooks Online.

Check the box next to each excluded transaction that you need to add back in for your reconciliation.Īll the transactions which were previously mistakenly excluded are now “un-excluded”, and back in the Banking Center.

Here you’ll see a list of excluded transactions. Here’s how to “un-exclude” banking transactions To resolve this problem so that you can reconcile the bank or credit card account, the excluded banking transactions will need to be “un-excluded” and added to QBO. Otherwise, you will not be able to reconcile your bank account to its monthly statement. Those missing transactions are usually the very same personal expenses which were excluded while working in the Banking Center.Įven if you used a business bank account to pay for personal expenses, you still have to include those personal expenses in QBO. When you go to reconcile your bank account to its monthly statement, you may notice that you won’t be able to reconcile because some transactions are missing. This may seem like a quick and easy solution to make these personal transactions “go away,” however, excluding personal expenses leads to a major problem.

From the drop-down menu, select Exclude Selected.

Check the box next to the downloaded transactions.

In the Banking Center, select the bank account.

What do we mean by “exclude them”? As a memory re-fresher, here’s how you exclude banking transactions:

Later, when viewing transactions in the Banking Center, they may identify those transactions as personal expenses and choose to exclude them, instead of adding them to QBO. Often, business owners realize that they’ve used a business bank or credit card account to pay a personal expense. The biggest mistake made with personal expenses in QuickBooks Online In this blog post, I’ll show you how to clean up personal expenses in QuickBooks Online. Jill and Bob knew that personal expenses didn’t belong in QuickBooks Online, because they read: Should you track your personal expenses in QuickBooks Online? However, they didn’t know what to do with with those personal expenses, or know how to clean-up the mess that they had already made. Obviously, they couldn’t get it to reconcile because they had excluded several transaction from QuickBooks. Problem solved – or so they thought! Eventually, they had to reconcile their business bank account in QuickBooks to its monthly statements. However, when they returned home to resume their business and catch up on their bookkeeping, they realized that they did something so horrible, that they needed counseling…Īs they worked through their bank feeds, Jill and Bob saw all the expenses related to their vacation, and they just excluded them from QuickBooks. Jill and Bob just made a huge mistake! They went on vacation and used their business bank account to pay for restaurants, hotels, and sight-seeing.