How to Create an Owner’s Draw Account in QuickBooks Online

  • Quickbooks

Small businesses can operate under a variety of different structures. If your business is a sole proprietorship, you’ll rely on an owner’s draw to pay yourself and to recover any investment in your own business.

In QuickBooks, you’ll need to establish an owner’s equity account to start paying out an owner’s draw. After that, performing an owner’s draw is as simple as writing any other check through QuickBooks.

You can add an owner’s equity account to your chart of accounts in QuickBooks Online or Desktop. To do so, just follow these steps:

  1. Go to Settings, and then Chart of Accounts.
  2. Click on New, and select Equity from the Account Type dropdown menu.
  3. Select Owner’s Equity from the Detail Type dropdown menu.
  4. Click on Save to complete the owner’s equity account creation.

The process to create a check for an owner’s draw differs between QuickBooks Online and QuickBooks Desktop.

QuickBooks Online

  1. Click on New in the main menu.
  2. Click on Check.
  3. Select the Payee from the dropdown (create a new Payee if necessary).
  4. Choose the Owner’s Equity account in the Bank account menu.
  5. Select Print check to print, or Print later to save for later.
  6. Click on Save and close to complete the owner’s draw.

QuickBooks Desktop

  1. Select Write Checks in the Banking menu.
  2. Select the Owner’s Equity account as the bank account.
  3. Enter the Payee Name.