How to record an owner’s draw in Quickbooks Online (QBO)
To record an owner’s draw in Quickbooks Online (QBO), follow these steps:
- Go to the “Banking” tab and select “Make a Transfer.”
- In the “From” field, select the bank account from which the owner’s draw is being made.
- In the “To” field, select the owner’s equity account (such as “Owner’s Draw” or “Owner’s Investment”).
- Enter the amount of the owner’s draw in the “Amount” field.
- In the “Date” field, enter the date on which the owner’s draw was made.
- Add a description of the owner’s draw in the “Memo” field (optional).
- Click “Save and Close” to record the owner’s draw.
It’s important to note that owner’s investments are not considered income for the business and owner’s draws are not considered expenses. They represent changes to the owner’s equity in the business as listed on the Balance Sheet, but do not affect the Profit and Loss statement. Be careful to not record these as business income or business expenses, or your CPA’s tax calculations will be incorrect!