Finance

What should I do if I paid a 1099 vendor from my personal bank account?

I tried to post a DR vendor and CR to owners equity.
Guest Writer
Head of Financial Partnerships, Xero Americas
min read
Opinions expressed by Entrepreneur contributors are their own.
I am glad that you came to us, as this type of transaction often confuses business owners and bookkeepers.

Going forward, try as much as possible to keep business expenses separate from your personal accounts as bookkeeping can become very cumbersome and in some instances your personal financial liability can be put at risk. It is okay if this is a one-off situation, just try to be strict about it going forward.

I will assume you are using Quickbooks for your bookkeeping. I would advise you to create an entry debiting the expense account you would normally charge for this vendor (i.e. consulting, accounting, outside services) and credit the "owner's draw" account.

If you pay yourself with a regular W2 salary from your business and wish to be reimbursed for this payment, you can treat it as a payable either through the regular payable system or a separate liability account.

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