How to set up owner draw in QuickBooks?

December 10, 2021
Quickbooks

Quickbooks is the world’s leading accounting software in the market today. There are many reasons for its popularity. One of the reasons is to the owner’s draw in Quickbooks.

In this article, we are going to see how to set up an owner’s draw in Quickbooks? In addition to that, we are going to see how to set up the same for different versions of Quickbooks, namely Quickbooks Desktop and Quickbooks Online.

But first, let’s understand what is owner’s draw is in QuickBooks?

What Is The Owner’s Draw In Quickbooks?

An Owner’s draw account is an equity account by which one can track the withdrawals of the company’s asset to pay an owner.

That’s why it is important for tracking withdrawals for the company’s assets and, eventually, pay to an owner. Now, let’s see how to set up the owner’s draw for different versions of Quickbooks?

Methods for setting up an Owner’s draw in Quickbooks

For Quickbooks Desktop

To set up an owner draw in QuickBooks desktop, we need to create an account that can be created in the following ways –

  • Go to the ‘Lists’
  • Then select the ‘Chart Of Accounts’ section
  • Now, in the bottom left, there is an option of ‘Account’ click on that
  • After that, choose ‘New’
  • Now, click on ‘Equity
  • After that click on ‘Continue’
  • Now, enter the account name for your owner’s account and also enter the description of the account
  • At last, click on ‘Save and Close’

The above mention method is the way for creating an owner’s draw account in Quickbooks Desktop.

Now, our owner’s account is created in Quickbooks Desktop, lets see how to write a check from the owner’s account in Quickbooks Desktop, which can be done in the following ways –

  • Go to the ‘Banking’ tab
  • After that, select ‘Write Checks’
  • Now, in the ‘Write Checks’ window, there will be a section of ‘Pay To The Order Of’, select that, now select the ‘Owner’ and enter the amount next to the $ sign
  • After that, in the check section, enter the amount of the check to the equity account, which you just created above for recording the owner’s draws
  • At last, click on ‘Save and Close’

You can record the checks in the owner’s account in Quickbooks Desktop by the above-mentioned method.

Next, we are going to see the same for Quickbooks Online.

For Quickbooks Online

For setting up an owner’s draw in QuickBooks Online, we have to first need to create an owner’s or an equity account as we did in Quickbooks Desktop, which can be done in the following ways-

  • Go to the ‘Gear Icon’ 
  • After that, select the ‘Chart Of Accounts’ section
  • Next, in the ‘Chart Of Accounts’, select ‘New’
  • Then, choose ‘Equity’ from the Account Type drop-down
  • After that, choose ‘Owner’s Equity’ from the Detail Type drop-down
  • Now, enter the opening balance for equity account
  • At last, click on ‘Save and Close’

The above-mentioned method is the way to create an owner’s or an equity account in Quickbooks Online.

Now, our owner’s account is created in Quickbooks Online, Let see how to write a check from the owner’s account in Quickbooks Online as we did for Quickbooks Desktop, which can be done in the following ways –

  • First, select ‘+ New’
  • After that, click on ‘Check’
  • Now, choose the bank account from your money will be withdrawn
  • After that, select ‘Print’, for printing out the check
  • Now, fill up all the check fields
  • After that, make sure you selected the “Owner’s equity” which you created above for quickbooks Online
  • At last, click on ‘Save and Close’ or select ‘New’ for writing down another check

By using above mention method, you can record the checks in the equity account in Quickbooks Online.

callnow

Toll Free No :

+1-877-412-2915
Call Now