Recording Infrequent Transactions in QuickBooks
Day-to-day transactions in QuickBooks are usually straightforward, but infrequent or unique transactions can sometimes be tricky. Here are some common infrequent transactions and how to handle them:
Security Deposits
✅ Track security deposits (e.g., rental or utility deposits) with a separate account for each. Consider creating individual subaccounts if you have numerous deposits:
- Go to Lists ➜ Chart of Accounts (or press Ctrl-A).
- Click Account ➜ New (or press Ctrl-N).
- Select Other Account Type ➜ Other Current Asset ➜ Continue.
- Name the account (e.g., Security Deposit – [Vendor Name]) and click Save and Close.
Refunds from Utility or Insurance Companies
✅ Record refunds by applying them back to the relevant deposit account:
- Choose Banking ➜ Make Deposits.
- Specify the vendor and choose the correct account (e.g., the asset account for deposit refunds or the original expense account).
Owner Contributions
✅ Record owner contributions by creating a separate Equity account:
- Follow the steps for creating a new account but select Equity.
- Name the account Contributions from Owner.
Distributions to Owner
✅ Distributions can be handled via payroll or separate checks:
- Payroll: Set up a payroll item for distributions. Choose Employees ➜ Manage Payroll Items ➜ New Payroll Item. Follow the setup for tax-exempt distributions.
- Separate Check: Choose Banking ➜ Write Checks, and select the Distributions to Owner account.
Loans to the Company
✅ If an owner loans money to the company expecting repayment, establish a Loan account:
- Create a Liability account in the chart of accounts and record the deposit of the loan.
Company Loans Money to Others
✅ Create a separate Current Asset account for each loan to track balances easily:
- Create a subaccount under a general Loans Receivable account.
- Make sure to create individual subaccounts for loans to employees or other parties.
- Be sure to use the proper subaccount when issuing an employee loan.
Loan Payments
Handling loan payments varies depending on the type:
- Interest Only: ✅ Post directly to the Interest Expense account.
- Principal and Interest: ✅ Split between the Interest Expense and Loan accounts.
- Extra Principal Payments: ✅ Apply directly to the Loan account.
Use the QuickBooks Account Reconciliation feature to ensure your loan balance aligns with lender statements.
Petty Cash
✅ Establish a petty cash fund for minor expenses:
- Write a check to Cash and exchange it for petty cash.
- Record expenses and replenishments in the petty cash account.
❌ Always require receipts for all petty cash transactions to prevent abuse.