How do I account for personal funds used to buy things for my business? -

I own a small ATV repair business and am having to pay for all the parts and materials used by the business with my own money. I am using Quickbooks for my business accounts. Should I create an expense account to keep track of everything I am buying or can I just list them as investments I am making into the business?

Daddy and I call it Owners Equity Cash Injection . It would be easier to tabulate this on a monthly basis. If your small business is a sole proprietorship, I would recommend injecting a surplus as operations capital. Depending on your state laws, or if your business in incorporated, you could actually make and interest bearing loan from yourself to your company. The money you loaned the company was already yours and had already been taxed. You don t want to be taxed on it again in 6 months or so when you go to get it back from your business.

You should track everything purchased for the business, as they can be written off against profits you make. If you don t, you ll end up paying more taxes than you should.