How to Manage Owner’s Capital in QuickBooks?
QuickBooks is accounting software which manages all the payments, invoices and cash flow of any business. It’s a choice of millions business owners. It makes their work so tranquil, remove all the major complications. Here is the example of owner’s capital into QuickBooks. Don’t get confused with the term Owner’s Capital; it refers to the total amount of cash used as the initial investment at the time of company being started. Or you can understand in another way- All the cash investments or any cash which is used to purchase assets or inventories. QuickBooks keeps a constant record on the capital funds of the business.
Here our experts’ team of QuickBooks Customer Support UK gathers the information for their users to get a better understanding with the QuickBooks.
- When you start to use QuickBooks for the first time you have to complete the easy step interview. When you get installed the software it will take to you to the “Easy Steps Interview”. Here you need to fill the basic information of the company like, contact information, legal organization and tax related information. QuickBooks program automatically create the “Owner’s Capital” account for the company. This can be known by the name “Owner’s Equity”.
- Collect all the documents with minute detail of the company. This may include deposited slips, cancelled checks from the personal funds which are used to start a business and loan documentations by which a company takes the loan. Owners’ capital is totally depending on the funds from personal accounts without the debts or by the use of a business capital loan.
- Now you need to create a “General Journal Entry”. For this you need to click on the “Company” button from the top menu bar then choose the option “Make General Journal Entries” tab. Then you will find a pop-up window which consists of five columns and several rows down, it is kind of a table will come in front of your screen. Here you need to enter the fill the information. There five main headings like- The Accounts, Debit, Credit, Customer and Class. This is the record of the initial investment here there is no need of customer and class columns.
- Now go to the “Owner’s Equity” the very first row of the first column. The first column is named by “Account”. After that click on the little side arrow of the first row in the first column. Once you done with it a window will come up in your screen containing all the accounts listed in the chart of the company’s account. Now in the second row the first column is filled by the account in which you deposited, so it will come in the Debit side.
- Now correspondingly “Credit” will come in the third column on the second row. Whatever be your initial investment is, the same will be your corresponding credit.
- If you are starting your business by taking loans then create a long term liability account. Now what you need to do is, open the chart of the accounts by go to the “List “button or you can go through choosing the “Chart of Accounts”. To create the new account holds down the “CTRL” and “N” keys.
- Now, choose the “Type” of new account. For choosing it, go under the “Type” bar then choose “Long Term Liability”. Select the button labeled “Enter Opening Balance” then enter both the date and amount of the loan. Then you need to make a “General Journal Entry” for the same amount to credit in the “Owner’s Capital” accounts and debit it, where you put all your funds.
- Contribute the investment portions according to your initial investments. After done with this analyzes that whether there is any friend or family member is interested to invest in your business. To mange it uses the percentage to create the equity accounts.
- Manage both the owners account with the different name as “Owner 1” and “Owner2”. Don’t mass up between two. Always make a new account for the new entry by hold on “CTRL” and “N”.
This is all you need to done to manage the “Owner’s Capital by QuickBooks. It removes all the obstacle and hurdles which any business can face. Most of the time businesses get closed due to the financial disturbance. QuickBooks are the first choice of small scale & medium scale businesses.
If any user has any problem with it can freely contact QuickBooks helpline UK by calling on the given toll free no +44-2080-890422