Personal Funds Account

You could use an Owner's Investment equity account if you don't intend to get repaid or a Loan From Owner Liability account if you plan on getting repaid for those expenses.

BTW, nothing should go to the OBE account and that account should always have a zero balance.

What does it mean when you say reconcile to zero balance?

How

I don't know if this is right, but I created reimbursement expense accounts to track money my corporation pays to me for business expenses paid out of my pocket. There is one for mileage I drive on business trips, bridge tolls, etc. At the end of the month, I just add up the receipts (and a spreadsheet tally of the month's mileage) and write myself a check. Someone tell me please if that's all wrong.

I did run into a question the other day- I paid for some software purchased on ebay with my personal PayPal (the corp. doesn't have one, and the guy couldn't take credit cards). I don't know the best way to record it. I wanted to receive item and enter bill so I would have all the info on the transaction (invoice # for example), but I couldn't see how to make that work with a payment to me as a non-vendor and I did see myself as a vendor in this transaction, so I wound up writing a check to myself using a reimbursement expense account and describing the transaction in the memo fields.

Maybe that's good enough.

Sounds good.

Just include receipts or some other documentation to attach to the check stub to document the business expense. For your milage make sure you have a milage log book of some sort. I'm assuming you are taking the standard IRS milage reimburesment amount of 48.5 cents per mile (2007 rate).

didn't a check to myself using a reimbursement expense account and describing

didn't > a check to myself using a reimbursement expense account and describing

And now for something completely off-topic-

Probably there are better ways, but what I did was make a spreadsheet of daily mileage for each month, print out the blank spreadsheet at the beginning of the month, use that as a log sheet, then transcribe the numbers at the end of the month and put the paper in a file. The spreadsheet calculates the total mileage and multiples by .485 to give me a dollar total.

In case anyone is wondering, I don't use the QB mileage calculator because my odometer quit at 140K (a couple of years ago) so I don't have beginning and ending odometer readings to enter, but I do have a trip computer which still works and makes the Quickbooks calculator redundant.

And I wanted my own fields (miles, ET, MPG, invoice#, description).

And, I don't remember for sure, but I think I had all this done before I noticed that QB had a trip mileage log.

I thought it would be a good idea for my personal funds account to start at zero at the beginning of the quarter or at least at the beginning of the year. You disagree?

Thanks

Can't agree or disagree. I have no idea what you are talking about.

My Personal funds account is a ficticious account. It is somewhere where I store business expenses paid with personal funds.

If that is the case then there is no reason for this account to start at zero. I use a similar make belive account called "Cash on Hand". When ever I make a cash purchase or need to record some other type of out of pocket expenditure I record it as a disbursement from this account. I started this account off at $100,000.00 so it will always have a balance. I don't expect to stay in business long enough to ever see it go below zero.

My business is not incorporated so I do not care about balance sheet presentation. Only income and expenses get reported to the IRS on my schedule C.

Why? Your personal funds account should reflect your true bank balance. I would hope for your sake that it is not zero-ever.

My mistake. I lost track of the thread. It's been a rough week.

The choice is yours if you want it to be zero at any point in time.

It's a liablity account since the company owes you money and you wish to be repaid. Post the expenses you purchased to their appropriate expense account (debit expense/credit Loan From Owner). At whatever interval (weekly/monthly/quarterly) write yourself a check from the business account to reimburse yourself: Debit Loan From owner/Credit Cash. The choice is yours as to whether you reimburse yourself for the entire balance or just a portion of it. Any balance in that account at year end will just roll over to the following year which is perfectly acceptable. Just make sure you use a Current Liablity account since you plan on repaying those debts within 1 year.