It happens. We all know we shouldn’t pay for business expenses using a personal bank account, but sometimes the wrong card gets used. Maybe the debit cards in your wallet switched places, or you were just starting your business and didn’t have a business account yet. Whatever the reason, the question is the same: how do you fix it in QuickBooks Online so everything still reconciles cleanly and your information stays accurate?
Here’s the right way to record a business expense that was paid personally. Here’s how to fix if you did the opposite.
Step 1: Manually Record the Purchase
If your personal account isn’t connected to QuickBooks Online (and it shouldn’t be), you’ll need to record the transaction manually.
Go to New → Expense.
If your personal account is connected to QuickBooks, you may need to disconnect it and redo these steps for all personal-funded business expenses to get accurate financials. Otherwise, your bookkeeping reports will misrepresent your actual business activity.
Step 2: Enter All Expense Details
Fill in everything: vendor, date, amount, what you purchased.
Leave the payment method as-is.
Step 3: Add the Equity Offset
Add a second line to the transaction.
Choose Owner’s Contributions or Owner’s Investments as the category.
In the amount field, enter the same dollar amount as the expense, but put a minus sign in front of it.
Example:
- Line 1: Paint Expense — $300
- Line 2: Owner’s Investment — -$300
It will look like magic the first time. QuickBooks shows the total as zero. What’s actually happening is simple bookkeeping: the expense account is debited and the equity account is credited, balancing each other out on the ledger.
Step 4: Save and Close
Hit Save and Close. The expense is recorded, and your books remain accurate.
How to Reimburse Yourself From the Business Account
If you want the business to pay you back, go to New → Check.
On line 1, select the Owner’s Investment account and enter the reimbursement amount (usually the exact amount you personally paid).
Describe what the reimbursement is for, then save and close.
You’ll still need to write or print a physical check from the business to yourself. The ledger is the map; your bank balance is the territory.
If you’d rather not deal with any of this, schedule a bookkeeping strategy call with me. I’ll help you clean up your books, keep everything accurate, and save you well over 80 hours a year compared to doing it yourself. Let’s talk about where your business is headed and how I can help you get there.