using a personal credit card

[hippyer]

Hello

I have a personal credit card with a £4,000 limit on it.
I would like to use this credit to help finance my business, but my question is how would I show this on my accounts?

If, when I spend on it, do I show it as money introduced and then use the receipt on expenditure?

How then would I show repayments made from my business account to the card.

I don't have an accountant.

 

[weebly_one]

I know how I would deal with it on Sage - if that helps!

I would set up a bank account in Sage for the credit card, but as the account is a personal one and not a business one I would treat any money owed at the end of the year as a directors loan rather than a charge on the company per se. It is in effect you as a business owner loaning money to the company.

You can then enter reciepts in the accounts as usual but mark them as paid by the credit card account.

Then when your business bank account pays the bills, that would be a transfer from the business bank account to the credit card account.

I would then reconcile the account each month from the statements, but ignoring any personal transactions on the card which should not go through the company accounts.

 

[MyAccountantOnline]

Hello

I have a personal credit card with a £4,000 limit on it.
I would like to use this credit to help finance my business, but my question is how would I show this on my accounts?

If, when I spend on it, do I show it as money introduced and then use the receipt on expenditure?

How then would I show repayments made from my business account to the card.

I don't have an accountant.

Maybe its time to consider getting an accountant

What system are you using for record keeping?

 

[elaine@cheapaccounting]

Are you a limited company or a sole trader?

 

[hippyer]

Hi all thanks for your responses.

I'm considering using the credit card purely for business transactions.
The card was actually in credit as I had my michael jackson tickets refunded to the credit card so could I simply label this credit card as a business credit card?

Or do you actually have to apply for a credit card under the details of your business?

Maybe getting an accountant would be a good idea, but the way cash flow is at the moment I'd have to pay him from this credit card. Basically, need to keep costs low and anything I could do myself instead of making payment is my attitude at present.

I'm a sole trader and I currently keep records of my accounts in a simple excel spreadsheet.

I keep all my receipts in one place and when it comes to the first of the month I enter the previous months income/expenditure into seperate spreadsheets. Then I put the receipts into storage.

 

[Si T]

Why don't you submit an expense claim to the business of purely the business related transactions and once you have the cash to reimburse yourself then you can.

If you are doing your own book keping the double entry is credit the Expenses Control and debit the relevant P&L accounts and VAT if applicable.

This will enable you to keep your personal credit card distinct from the business and help your eventual accountant to distinguish what is your genuine business expenses and not have to trawl through your credit card transactions taking them time and costing you money.

 

[Woodcrest Accounting Serv]

Hello

I have a personal credit card with a £4,000 limit on it.
I would like to use this credit to help finance my business, but my question is how would I show this on my accounts?

If, when I spend on it, do I show it as money introduced and then use the receipt on expenditure?

How then would I show repayments made from my business account to the card.

I don't have an accountant.

Hi,

You can put the money from the Michael Jackson tickets as capital introduced and set up a seperate bank/credit card account in the accounts.

When you get your credit card statement through each month, gather all the invoices and receipts together and enter each business item as an expense on the profit and loss, then the other side of the double entry goes to create a liability on the balance sheet for the amount owed. When you make a payment from the business bank to the credit card company, you credit the business bank account and debit the liability for the credit card.

 

[Moneyman]

This can get messy. I would introduce money by the usual channel (stick it in via the bank) and then simply keep reciepts, cash and credit cards and paythem from the company account.

 

[LaShel Bookkeeping]

You wouldnt have to look at this until your year end ayway. You would have to mark on your credit card statements which items were personal and the other transactions would have to be matched up with receipts as proof. I wouldnt worry too much about capital introduction or balances on the card being in credit as this is where it gets tricky if you're being paid interest on this receipt. Just keep it simple..