Insider Tip: Business Funds For Personal Stuff

What do you do when you use your business funds for personal expenses?

That is a fairly simple answer.

You have to decide how you want to proceed.  And by that I mean, will you be reimbursing the business or not?

If you will be reimbursing the business, I suggest using an Expense account called “Other Expenses” for this.

First, you categorize the personal expense transaction to this account.  

Second, you make a payment to the business for the exact amount. 

When that deposit hits the bank, you’ll categorize that deposit to the same “Other Expenses” account.

What this does is zero out the original expense so at the end of the reimbursement, nothing actually affects your bottom line.

Cool, right?

Now, what if you won’t be paying your business back?

If you don’t want to reimburse the business, that’s cool.  Simply categorize the personal expense as an Owner’s Distribution and call it a day.

Happy Expensing!

Crystal