OK, I am new to this and trying to figure it all out. I don't know how to really put this, so I will give a "What if".

I get paid from a client for $2,000. My personal credit card is due for $1500 and I want to pay it off (I want to pay off our debt so we can buy a house in a couple of years). HOW do I legally take the money out of the Business Account to pay my personal credit cards. I know you are suppose to keep Business and Personal seperate!! I don't want to get in trouble with the IRS, but I want to do this business to pay off debt.

????????????????

-Cherish

You would record the withdrawal as an Owner's Draw.

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Kathy Crofoot
http://www.kathycrofoot.com

Cool. Thanks. I have Quickbooks, I am guessing there is a way to show that in there. I don't really have things set up yet. I haven't really started yet. this is just something that I thought of and wanted to figure it out.

Great question. I am looking forward to see what everyone's answers are.

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-Becky
Life is 10% what happens, 90% how you react.

Owner's Draw is an equity account. As the owner you are drawing out cash from the company.

The transactions in QuickBooks would go like this:

Invoice Client
Receive Payment from Client
Deposit to Business Checking account
Write 'check' to self against Owner's Draw account.

Remember, your equity accounts show up on the Balance Sheet, not on your Profit & Loss statement.

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Kathy Crofoot
http://www.kathycrofoot.com