When an owner draws a certain amount, he/she may want to record it. Making the record can be essential when the drawings are made for business expenses. For recording or entering these drawings in QuickBooks, several methods can be followed. You can either set up your draw account in the accounting software or record your expenses to save the drawings.
In this blog, these are the methods that we will be looking at for entering an owner’s draw in QB. Along with this, we will show you how to record an owner’s draw in QuickBooks Online as well.
We will be going through 3 sections in this post. These sections will talk about the following:
Why Enter or Record an Owner’s Draw in QuickBooks?
The drawings of an owner can be recorded or entered in QuickBooks for the following reasons:
The owner may want to keep a track of his or her personal expenses. The amount spent on these expenses should be kept separate from business expenses.
Expenses relating to the company may need to be maintained in the form of a record.
By entering an owner’s draw, the accuracy of financial records can be maintained.
How to Set up a Draw Account in QuickBooks?
One of the ways to record the drawings of an owner in Quickbooks is by creating an account for the same. The owner’s draw account in QuickBooks can be made by running Lists. Here, you can access the Chart of Accounts. Then proceed to Account and opt for New. You can create your account using this option. Then the account can be set up for recording the drawings.
You can run the menu titled “Lists” in the software.
Push these keys on the keyboard:
“Ctrl” key + “A” key
Or, you may press “Chart of Accounts”.
Visit the “Account” option.
Tap on the “New” feature.
Opt for “Equity”.
For proceeding, choose “Continue”.
An account will be made. Write “Owner’s Draw” as its name.
Provide a description of the account.
Press “Save & Close”.
Your account will be made and set up now. You can record the owner’s draw in QuickBooks using this account.
Tip: Along with the drawings of an owner, cash withdrawal can also be entered. See here how you can record a cash withdrawal in QuickBook.
How Do I Record an Owner’s Draw in QuickBooks Online as an Expense?
We have found that an owner’s draw can be added to QuickBooks Online in the form of an expense. To record an expense, first, you can tap on Plus (+). Then you can choose Expense and head to Payment Account. On using this dropdown, you will see Equity. This option will assist you to record the drawings as expenses.
Here, you can see more instructions regarding how to record an owner’s draw in QuickBooks Online.
Choose “Plus (+)” in “QuickBooks Online”.
Tap on the “Expense” option.
Click on “Payment Account”.
Prefer “Equity” from the appearing menu.
Add the details asked in this step.
Use “Save and Close” in the final step.
In Step 5 of the method shown above, you will have to mention the details of the drawings. The amounts involved should be accurate. Otherwise, the recorded drawings can affect your financial records.
To Briefly State
Recording the drawings of an owner or business owner in QB is simple. The two methods given here are easy to understand. By following any of them, the drawings can be added in no time. For both personal and business expenses, you can make additional accounts and set them up. Thus, using these methods, different types of drawings can also be added.
Let us read more such blogs to understand what more you can record in this accounting software. Click here to view how to record accounts payable in QuickBooks. With this post, you can get to know how to record a transfer between accounts in QuickBooks.