"The business owner does not want to be 'employee or consultant.' "

This person will benefit from some review, because he/she seems wrapped up in Semantics and need to understand Facts,.

By forming an S Corp, by definition, he/she put themself into the position of being the Employee of that S Corp. Forming an S Corp = I want to have my business Entity be separate from myself.

Otherwise, you would operate as a Sole Proprietorship. So, perhaps someone else gave some bad guidance, here? Why is there an S Corp?

The IRS requires Reasonable Compensation through Payroll be paid to the people doing the work of the business. I cannot state that every time, and have someone try to justify not following the rule. You can ignore this, but then the IRS comes calling. You recall your position of Equity? Once they see Draws (an error, for corporate structure), or Distributions, or never any funds taken at all (as in your first question) and the amount "left in the business" they have the right to declare it All as "should have been payroll" and "you attempted to avoid payroll taxes" and that is illegal and that is subject to tax and interest and penalty.

You might not be afraid of the IRS, but I am.

"So I assumed no expense to record."

Bad assumption.

"Just pure A/R and Sales Revenue and that is it."

AR is unpaid sales for the date of the sale. If you are using QuickBooks, for instance, a Sale is made on a Sales Receipt when it also is paid that same date. Example: I do your work and you pay me through PayPal = no Invoice and not AR. Income is the activity, resulting in money in the PayPal Bank.

Or, I invoice you and you will pay me next week. That's why AR exists = different date for the Sale than for the Payment. Sales = AR. Then, Payment clears AR and creates money to bank.

"But at the back of my mind, I am feeling there has to be some expenses to record in QB."

Yes: PAYROLL.

But for me, a Sole Proprietor, Nope. Well, I am incurring Internet charges.

"This is why I raised the question. Maybe I am over thinking it!"

You have to know what is an Incurred Cost, and what is a Value or Worth, but not Real Cost.

This is a common misunderstanding:

Let's be partners in house flipping. I don't do labor. I put in the Money. We need $100,000 startup funds.

That isn't Cost. That's Equity, my contributed capital. Or, I loaned it to the Partnership, which now has the Liability and needs to repay me, because you have no money to put in, so that is very lopsided for Equity. Let's make it Loan, not Capital Equity. It reduces Equity, because our partnership now is in debt to me.

Do you know how to read a Balance Sheet:

Asset (bank) $100,000

=

Liab $100,000

+

Equity $0

That's Partner Loan.

Or:

Asset (Bank) $100,000

= Liab $0

+ Equity $100,000

That's Paid In Capital.

Now you put in Work. You know this as Sweat Equity. Let's pretend you figure your time is worth (intangible value) $100 an hour and you expect to take half a year working full time to get this flip done. That's 1,000 hours. You see this as $100 X 1,000 = $100,000 or equivalent to my Money.

But it's not. It's not even an Expense. But it is Invested in the project and makes the project successful and we get Profit. Neither my money nor your time are Costs.

My money in the bank (asset) is used to buy materials for the job (assets, as Work In Progress). Even when we spend all the money in the bank, there was No Expense. This scenario is the difference beteeen Expense and Expenditure.

And your Time, as Sweat Equity, is what got us More Profit. There is no Cost. You are not on payroll. You and I are in a partnership. You cannot be your own Employee.

Unless we decide to file the papers to elect S Corp Treatment for our LLC partnership. If we do this, we are both shareholder-empoyees. We both need to get paid through payroll. But now, you realize this type of operation (flipping houses) might not have any money coming in for long stretches of time. See why S corp is not a good business entity type for this business model?

As for "not consultant", duh. Like that is a badge of dishonor or disgrace or something? If you are not an independent contractor Consultant in your line of work, for a service industry, then you simply need a different Label. You might even have some sort of Certification: Consulting Engineer. Accounting Wizard. Architectural Designer <== Not Licensed

Vs

Architect <== Licensed

You both need some good guidance and some discussion time with mentors, I think. This is the exact stuff I taught in my QB classes, because I found the people coming to my QuickBook classes had a lot of wrong concepts.

I was supposed to teach Payroll as a 15-minute session. I saw a need so great that I was proud when I got it down to a 6-hour class.