The Beginner’s Guide to Recording Expenses in Quickbooks
As a business owner, you’ll need to record all business-related purchases for tax purposes. If you purchase a product or service that’s used to help facilitate your own business, you can typically deduct it from your taxes. To take advantage of this deduction, though, you must keep excellent financial records of all business-related expenses. Thankfully, Quickbooks makes recording such expenses a breeze. Even if you’ve never used Intuit’s popular accounting software, you should have little or no problem recording expenses.
To record expenses in Quickbooks, log in to your account and click the “+” button at the top of the main menu, followed by “Expense.” From here, you’ll be able to select the vendor or user to whom you are making the payment. In the upper-right corner of the menu, click the drop-down button and select the payee’s name. If you don’t see the vendor listed here, you’ll need to add them to your account. Once added, you can go back and select the vendor as the payee.
Next, click the drop-down menu next to the “Balance” field. This will allow you to specify the account from which the expense was made (e.g. checking, savings, credit card, etc.). It’s important to note that you won’t see debit card listed as an option. Rather, if you want to record an expense that was made using a debit card, you must choose checking account. Checking accounts are handled in the same way as debit cards, meaning there’s no need to use a separate “debit” account. You can use “checking” for purchases made using your checking account or debit card associated with the respective bank account.
Under the “Payment date” field, enter the date on which the purchase was made. And next to the field, you’ll see an option for “payment method,” which you should click to select the method of payment used for the purchase.
Finally, you’ll have the option of choosing a category for the expense. This is done by clicking the drop-down menu under “Account” and next to “Description.” Quickbooks has dozens of different categories, ranging from advertising and automobile to disposal fees and dues and subscriptions. Choose the category that’s most relevant to the purchase. This won’t affect the outcome of the expense record, but it’s still useful for reference purposes later. When finished, click “Save” to save your changes and complete the process.
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