How to Record Owner Investment in QuickBooks?

Do you want to grow your business by injecting your own funds into it but want to avoid the hassle of mixing personal expenses with business expenses? Know how to record owner investment in QuickBooks.

Well, who would not? Every business owner, when they start their business, put in their own funds to give a head start to the up and running of the business. It helps in improving the new business’s cash flow situation and helps in funding equipment, machinery, research cost, staff hiring, etc. Now the question arises if there is actually a need to record the owner’s investment as a separate item in the books of accounts. And the answer is, it certainly is.

Recording the owner’s investment as a separate item in the books of accounts is a very important activity as it helps in keeping the books of accounts accurate and up to date. Owner investment can be in the form of simple cash injected into the business or the owner’s fund used for buying assets or inventory. QuickBooks can help you in tracking the owner’s investment and record the transaction with the help of a series of simple steps. In the next section, we will see the detailed process for recording the owner’s investment.

Advantages of Record Owner Investment in QuickBooks

There are a few advantages that you get after recording owner investment in QuickBooks. These advantages are as follows:

• It helps to keep track of the investment using the Equity account.
• You can check the investment amount anytime whenever required as it is recorded into the QuickBooks account.
• You can also add other equity accounts as the sub-accounts under the main equity account.
• Get to know when the owner or partner added the equity to the business.

How to Record owner Investment in QuickBooks?

Follow the step-wise step process ways to record the owner’s investment in QuickBooks.

Step 1: Set up an owner’s Equity Account in QuickBooks

The process starts with setting up an owner’s equity account by following a series of simple steps:

1. First of all, go ahead and click on Settings (gear icon) and then click on Chart of accounts on the QuickBooks page.
2. After that, you need to click on New and then go to the Account type drop-down menu and select Owner’s equity.
3. Now go to the Detail type drop-down menu and choose owner’s equity or partner’s equity as per your requirement and then click on save and close button.

By following the above steps your owner’s equity account will be set up, now let us move toward the next action.

Step 2: Steps for Recording Owner’s Contribution in the QuickBooks

You can follow the below steps for recording the owner’s investment in the business in your books of accounts in QuickBooks:

Step 1. In the initial step, you go to the QuickBooks page and click on accounting.

Step 2. Once you have clicked on ‘Accounting, click on Chart of Accounts and then click on New.

Step 3. Now in this step, you need to click on New and under the account type select Equity and choose Owner’s equity (as set up earlier) from the detail type drop-down menu.

Step 4. In this step, you will have to type the owner’s contribution or equity in the name or description.

Step 5. Once you are done with the above steps, go ahead and type the owner’s investment fund / amount in the balance field and hit on save and close button to finish the process.

There is another way as well, that is if your bank account is connected to QuickBooks, you do not need to actually record the owner’s investment, you can simply categorize the transactions associated with your deposits following the below simple steps:

1. Start by clicking on the ‘New‘ button and then click on Bank deposit.
2. Now from the Account type drop-down menu select the relevant bank account, the one which is connected and you are depositing the money in it.
3. Now you need to enter the date of the deposited money and enter the name of the investor in the Received from the box under the ‘Add funds to this deposit’ section.
4. In this step, you need to choose the appropriate equity account in the account field and specify the payment method.
5. Now you need to enter the owner’s investment amount in the Amount field/box and click on save and close button.

Step 3: Return the Funds From the Investment

Here is how to record an investment once you have received it and are able to repay it. You might need to record paying yourself, your partners, or co-owners back after you record an investment at a later time. An example of this is capital disbursement.

Paying with an actual check

Follow the below-mentioned steps in case you are going to send someone a paper check.

1. First, you have to select +New and then you have to select Check.
2. Enter the person or company you are repaying.
3. Then you have to enter a check number in the check number field.
4. The Category Details section should contain the following information.
   • First line: The equity account you use in QuickBooks to keep track of the investment and the amount you are repaying right now.
   • Second Line: The amount of interest included in your current payment as well as the expense account you use to keep track of your interest payments.
   • Other lines: Any extra charges and their appropriate accounts.
5. At last, you have to select Save and then close.

Set Up an Owner or Partner in QuickBooks

You have to record the things like yourself, the owner, or the partner as the supplier into your QuickBooks account. This helps you to track the capital that is invested by you and your partner. To set up owner or partner the steps are:

1. In QuickBooks, click on Expenses.
2. Click on the option Suppliers menu.
3. Further, select a New supplier to add one.
4. Provide all the information that is required and important.
5. In the end, click on the Save button to save the information about the new supplier of the business.

Let us now move towards the frequently asked Questions section, where we have gathered the user’s queries answered by the experts.

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