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How to record business expenses paid with a personal credit card?

Hello, 

I am new to QB PRO 2017 and would like to know how to correctly record business expenses paid with personal credit cards, which was paid from my personal bank account. I have searched online and was not completely sure how to do it correctly. I entered credit card charges correctly in QB for many different items purchased. All these expenses incurred before business bank was opened. The company is a incorporated company. Let's say the total amount is $1,000. Can anyone please let me know step by step.

 Thanks

Best answer 03-11-2019 06:17 PM

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Established Community Backer ***

Since you are a corporation, the amount you paid for expe...

Since you are a corporation, the amount you paid for expenses is a loan to the company.  Create either a liability account or a credit card account name due to [name] and post the transactions there (I would use the CC type account since it just makes transaction entry easier, but there will be other opinions)

Later the corporation pays you back

7 Comments
Established Community Backer ***

Since you are a corporation, the amount you paid for expe...

Since you are a corporation, the amount you paid for expenses is a loan to the company.  Create either a liability account or a credit card account name due to [name] and post the transactions there (I would use the CC type account since it just makes transaction entry easier, but there will be other opinions)

Later the corporation pays you back

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Thank you very much!

Thank you very much!
Established Community Backer ***

You're Welcome

You're Welcome
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when the corporation pays you back how do you indicate to...

when the corporation pays you back how do you indicate to qucikbooks to settle this account/match? Basically I have say 10 transactions assigned to my CC account and today I decide to pay myself that amount from corporation to personal account using online banking. this shows as a sum of these 10 transactions i.e. 1 transaction of say 1000£ on my bank account. How do I indicate to quickbooks to match this with those 10 transactions? Or will quickbooks do it automatically? cheers
Community Contributor *

Re: when the corporation pays you back how do you indicate to...

I've read somewhere here you create a bank account with zero balance "Shareholder Account" for personal bank or credit cards. Both can be combined into the same account as they're not business related and meant to keep a total record. Any purchase would place the SH Account into negative balance until you pay yourself in the form of a transfer until the negative balance goes back to zero. This way you can add proper details and expense accounts when writing a check in SH Account. The idea is to keep the SH Account balance at zero unless you need to use the personal card for emergencies where you business account can't cover the expense. I think that's right,

Active Member

Re: when the corporation pays you back how do you indicate to...

My boss takes cash out of his personal savings. He says that he pays our subcontractors with this cash. I have no idea if this happens or not. He now wants to be reimbursed for these cash payments but doesn't want it to go through Quickbooks.  I am clueless how to do this but I feel it's illegal. He mentioned something about a creating a bill... 

Frequent Contributor *

My boss takes cash out of his personal savings.

Queenie:

Ouch. You can try explaining that, for tax purposes, you need the third-party payment info in order to allocate the costs to expenses and record the GST (if any). Or ask him how he wants the payment presented in the year-end financials, and then work back to how to record the payment. Is there anyone to whom you can talk?

Creating a bill sounds "creative" and may pose difficulties for you as well as he in future.

But to answer your question, creating a bill will need a payee (him) and an accounting allocation (expense or equity?).