Owner’s investment refers to the personal money that is invested by the owner and business partner to start a new business. It is also called Capital Investment. If you are planning to start a business, it is essential to keep records of every investment used for hiring employees, buying equipment, and other assets. If you are seeking help to learn how to record owner contribution in QuickBooks Online, read this guide carefully.
The purpose of our guide is to teach you how to record owner contribution or capital investment in QuickBooks Online and Desktop for Mac.
- Recording Owner’s Contributions in QuickBooks
- How to Record Owner’s Cash Contribution in QuickBooks Online?
- Step 1: Create the Equity Account
- Step 2: Record Your Investment
- Step 3: Enter the Paying Back the Investment
- How to Record Owner’s Cash Contribution in QuickBooks Desktop for Mac?
Recording Owner’s Contributions in QuickBooks
QuickBooks enables its users to add the investment of business partners and own invested capital. In addition, users can accurately track them. If you want to record the owner’s cash or capital investment in QuickBooks, you can do that on the financial reports. In the following discussion, we will show how to record owner contribution in QuickBooks Online. QuickBooks for Mac users can also learn to record the capital investment and track them.
How to Record Owner’s Cash Contribution in QuickBooks Online?
In QuickBooks Online, you need to perform a series of steps to successfully record the owner’s cash contribution. To get started, one has to set up an equity account. Only after that, you can record the investment. Later, you can pay back your funds from an investment. To know the entire procedure for QuickBooks record owner contribution, go through the following information.
Step 1: Create the Equity Account
To add the capital investment, you need to add the equity account first. By doing so, you can track the money that owners or partners contribute or draw from the business. This becomes an easy way to find out what the owners or partners have contributed to the business.
Remember that the owners own stock in a company whereas the partners invest money and other types of assets with sharing in the losses and profits. Here, we will show you to set up the partner or owner as a supplier. Along with this, you will learn to create equity accounts.
Set Up the Partner or Owner as a Supplier
QuickBooks uses suppliers to track what you, co-owners, or partners contribute to the business. Thus, you will require to set up the owners and partners as suppliers.
- Navigate to the “Expenses” section.
- Then, click on the “Suppliers” menu.
- Select the “New Supplier” option.
- Fill in the required and then hit the “Save” button.
Set Up the Equity Accounts
When you are done adding the partner or owner as a supplier, you can continue creating the equity account. By doing so, you can check if someone invests and draws from the business.
- For adding the single owner, you can click on the “Settings” icon.
- Then, click on the “Chart of Accounts” section.
- Here, you need to click on the “New” button.
- Click the “Owner’s equity using the “Account Type” drop-down menu.
- Now, move to the “Detail Type” drop-down menu and choose the “Partner’s Equity or Owner’s Equity” option.
- Then, click the “Save and Close” button.
- In case you want to create multiple equity accounts, you need to set up the main equity account.
- Then, set up separate equity accounts for each owner or partner.
- Thereafter, you can enter the required details.
- Select the “Is sub-account” option.
- Here, you can add the parent account.
This is how you can set up the solo equity or multiple equity accounts for the owners and partners in QuickBooks. After creating the equity accounts, you can easily record the investments when added to your business.
Step 2: Record Your Investment
If you have already connected with the bank account then you don’t have to record the contribution or investment. All you are required to categorize the transaction linked with the deposits. In case you don’t import the bank transactions automatically then you can record the deposit into the equity account. For that, you can do the following:
- Click on the “+New” button.
- Then, select the “Bank Deposit” menu.
- Now, click on the bank account using the “Account” drop-down menu. Make sure you choose the account to which you want to deposit the money.
- Here, you can add the “Date” to which you want to deposit the money.
- Now, move to the “Add funds to this deposit” section and add the investor name from the “Received From” field.
- At this point, you can choose the relevant equity account using the “Account” drop-down list.
- Mention the “Payment method”.
- From the “Amount” field, you can add the investment amount.
- Press the “Save and close” button.
Now that the equity account is created and the investment is entered, you can pay back your fund from the investment.
Step 3: Enter the Paying Back the Investment
Once you record the investment, you may require to record your partner, co-owners, or yourself back at a later date which we call capital disbursement. If you want to pay with the cheque, pursue the following steps:
- Click on the “+New” button.
- Then, select the “Cheque” button.
- Add the business or person you are paying back.
- Enter the cheque number in the “Cheque no.” field.
- Go to the “Category Details” section and add the required details such as:
- In the “First Line”, you need to add the equity account for tracking the investment. Along with this, you have to enter the amount to pay back.
- The second line should include the expense account for tracking the interest you are paying. It should also include the amount of interest as a part of the payment.
- In other lines, you can enter the additional fees and appropriate accounts.
- Click on the “Save and Close” button.
By using these steps, you can pay back using the cheque. However, if you want to pay by credit or debit, this can be done too. Now you have learned how to record owner contribution in QuickBooks Online.
How to Record Owner’s Cash Contribution in QuickBooks Desktop for Mac?
Users who run QuickBooks on Mac PC can also record the capital investment. To get started with this, you will have to create an equity account and record the capital investment. To know the entire procedure, check these detailed steps:
Set Up the Equity Account
QuickBooks for Mac allows you to create an equity account. All you have to do is choose the type of account and add the name for your account.
- Launch “QuickBooks Desktop” on Mac computer.
- Go to the “Chart of Account” menu on the homepage.
- Press the “Plus (+)” located at the lower left.
- In the “New Account” window, you can select the “Equity” option using the “Type” field.
- Now, go to the “Name” field and add the account name.
- Press the “OK” button to save changes.
If required, you can create more equity accounts through the Chart of Accounts option. This will help you to track the owner’s equity, owner’s draw, capital investment, and capital stock.
Important Note: In case you are having your own company then it is recommended to add one equity account at least so that you can track the personal investments as well as the owner’s draws.
Record the Capital Investment
Once the equity account is set up, you can continue recording the capital investment. For this process, you can make the deposit. Here are the steps for the same.
- Click on the “Banking” menu.
- Then, select the “Make Deposits” option.
- In case you see the “Payments to Deposits” window then perform any of the following steps:
- Choose the payments that you wish to deposit with the investment check.
- Click on the “Cancel” button to deposit your investment check alone.
- Move to the “Make Deposits” screen and select the bank account you want to deposit the money.
- In the “Detail” area, add the name of the considered person from whom you have received the money from along with the investment amount.
- Click on the appropriate equity account from the “From Account” list.
By performing all these steps, you can record the capital investment in QuickBooks Desktop on a Mac computer.
Capital investment or owner’s contribution is the acquisition of money or the procurement of long-term assets, e.g., vehicles, machinery, or real estate to further a business’s objectives and goals. By recording the owner’s contribution in QuickBooks, you can know what is invested by the owner or partner. In this guide, we have already shared how to record owner contribution in QuickBooks Online and QuickBooks Desktop for Mac.
Do you want more such guides? Check out the following guides on QuickBooks:
Frequently Asked Question
Assuming that a shareholder is an owner in a company, you can record his/her contributions in QB. Please keep in mind that they should be added to the equity account. To reach the account, first, go to “Accounting” in the software. Then using COA, select “Account Type”. Here, the specified type “Equity” will be mentioned. Use it to continue recording the amount.