QB Q&A: Paying Vendor Bills w/Personal $

Gerlinde writes:

We have purchased inventory that we paid for with our personal money. We've always entered this into A/P in QuickBooks (Enter Bills). I now want to reimburse myself for the inventory purchase. I was trying to record the bill payment, but QB would not allow me to change the name of the payee from the vendor to my own name. How can I pay myself and get these bills off the books?

My answer:

Go to the chart of accounts and create a new bank account called "Wash Account." Then go to the Pay Bills screen and select all of these vendor bills you want to be reimbursed for. Select the Wash Account as the Payment Account. Pay them as you would a normal bill.

Go to the Wash Account in the chart of accounts and make a note of the total. Now go to the Write Checks screen, and at the top select the regular checking account that you want use. Make a check payable to yourself from this regular account in the amount in the Wash Account. In the lower half of the screen, in the Expenses tab, select the Wash Account. Save the transaction.

QB has done the following:

1. Recorded these bills as Paid.
2. Recorded the payment to yourself.
3. Zeroed the Wash Account.

Now to back to the chart of accounts and make this Wash Account inactive. You don't want to accidently use it to pay regular bills. If you ever need to use it again, make it active, and be sure it always has a zero balance when you are done using it.