I have a personal credit card that i use on the odd occasion to pay for things for the business. I have this set up under capital accounts (Personal Credit Card). When i pay for items using card i create a expense claim (Members) I then make repayments weekly from business account to repay. I have this dd as a bank rule to automatically show as a payment to capital accounts (personal credit card), is this correct.
This sounds a bit cumbersome. For simplicity, I would set your self up under Settings - Expense Claims Payer then do your expense claims for the business expenses on the card to there (not member) and then have the dd directed towards the Expenses Claim account.
This will keep everything (claims & payments) contain within the one account.
Ok thank you
I have done that, but it now shows as an amount in less liabilities. Do I need to have this here as it is a personal cc. I do use it for personal use as well.
Yes, the expense claim is showing as an amount owing to you which will then be paid by the dd. Ignore that it is a personal credit card, you could be paying for the expense with cash out of your pocket.
ok once the amount is paid back, if i choose to continually pay an amount to cc from business account ( i am a sole trader,) what would i assign this to. Owner drawings perhaps. Just so i can show where the dd is going to.
Yes, any overpayments would go to drawings
ok thanks for all your help
@toby, you will find a complete discussion on expense claims here:
I might just suggest that if you mainly use the credit card for business (in terms of number of transactions), it may be easier to treat it as a business credit card. This means you can create a cash account and then all personal items could be put to drawings. This may make it easier for you to avoid accidentally missing a transaction that should be included in your accounts which in turn may help lower the tax payable and decrease any VAT (UK specific but check your local taxman). If you pay for the credit card using business funds - which is highly likely if you are a sole trader then it makes it easier to account for by using the transfer function. If not the the payments can be done using cash recieved function from capital introduced. Just an alterntive way of doing things - nothing wrong with using expense claims however it is in my view easier to go wrong.
@cdssal is absolutely correct. The results will be the same. I think the question of whether to (a) do expense claims that get cleared to an appropriate equity account (depending on business structure) or (b) set the credit card up as a business cash account with period draws for personal expenses depends on how often the card is used for personal versus business expenses. I actually do a combination of both.
Thanks for all the help. I have decided to do expense claims, that seems the easier option for me.