Tried setting credit card up and deleting transactions not related to this business. Was gonna do a journal entry to zero out account and classify to equity as a capital contribution as I do not have any income coming in at the present moment.
It would be nice to be able to get these expenses in with the bank documentation from the credit card company. Be able to apply to different businesses would help those of us who do different things under different EIN’s. It is the equivalent to a Social Security number for business. Same number of digits just in this format:
You should record all business-related expenses incurred on personal credit card under Expense claims tab.
The only problem is that expense claims tab doesn’t support importing of bank statements yet so those transactions under Expense claims have to be really recorded manually. Do you have a lot of business transactions on your personal credit card that you would rather prefer importing bank statement?
I have started using this software and loving it…I got stuck at the below situation therefore needs advise:
I have been using my Personal Credit Card a lot for business and now totally understood the Expense Claim tab to be used for business related transactions through personal credit card.
However, I don’t really get the following, sorry being naive here:
What is the purpose of creating Credit Card Account under Bank Accounts (In my case where I use personal card for both (Personal & Business), is that useful?)
If I create a Credit Card Account then it will be treated like a money in the bank and increase the asset?
Even if I create the Credit Card account then how I would make it negative?
Also the Expense Claim if paid will reflect in Expense Claim under Account Payable (Liabilities). How can we make the payments to the Credit Card under Account Payable (Liabilities).
Personal credit cards shouldn’t be created under Bank accounts tab. Only cards which belong to the business. Business expenses on personal credit card should be recorded under Expense claims which means someone else paid on behalf of the business and now business owes this person (you) money.
Currently credit card account will be treated as any other bank account. Since credit card balance is usually zero or negative, it will actually decrease your assets which is not correct. I’m planning to improve Bank accounts tab so some accounts could be marked as bank overdrafts so those balances are reported as liabilities.
When you create credit card, the balance will be zero. When you record payment from credit card, the balance will go to negative.
I don’t understand this. Accounts payable is used when paying purchase invoices to suppliers. What do you mean by “expense claim under accounts payable”?
I will delete the Personal Credit Card A/C under Bank Account.
Can I treat the Expense Claim as a virtual credit card account? In that case the amount will be shown as liability and I can reimburse (Pay Credit Card) as I go?
Regarding the last point, you already answered about Expense Claim, however my query was:
There is a Account head called Credit Card under Liabilities:
How can I use that (Credit Card) to pay for something?
How can I make payment to that (Credit Card) account?
Sorry I am not an accountant and being naive here.
When you pay out from your business bank account to reimburse yourself for expenses on personal credit card, allocate the payment to Expense claims account. It doesn’t matter whether you transfer money to yourself or directly to personal credit card, if it’s reimbursement for expense claims, then allocate it to Expense claims account.
Account Credit card under liabilities was probably created by you. It’s not an account that is created by default. You should delete this account as I don’t see any point for you to use it.
There is another around it. If you set up a vendor
for yourself inside accounts payable. That will isolate your expenses from payroll. It sounds like the long way around to do that but it’ll do the same thing.