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Level 1

How do I enter business expenses paid by personal credit card?

I've been buying items for the business including materials for making products, equipment, office supplies using my personal credit card. how do I enter these transactions?

Thank you for your help.

4 Comments
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Level 2

How do I enter business expenses paid by personal credit card?

Hi sdolcie

You will want to record these purchases as an Owner Contribution to the business.  Go to your Chart of Accounts and enter the following accounts.  First = Owner Capital Account (Equity type) and also two subaccounts called Owner Contribution and Owner Draw.  When you purchase the items make a journal entry that you Debit the expenses, such as office supplies, and Credit the Owner Contribution account.  If the business pays you back = write a check using the Owner Draw Account in the account section at the bottom of the check.  This will get you by in the meantime - but at tax time I would speak to your accountant if they would prefer that you loan the business money and collect interest from the business on what you loan it.  This is a good tax time talk to have with your accountant since they know how you are organized and of course the Canadian tax laws.  Hope this helps! : )

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Level 1

How do I enter business expenses paid by personal credit card?

Hello, I have kind of the same problem. I live in Morocco but I have my company settled up back in the US ( LLC, partnership). Some of my bills have been paid through a company credit card through Bank of America. I entered these bills and matched them with the bank statements. However, I have bills that I have paid through my personal bank account or in cash. I entered these as bills and it showed up as unpaid ( accounts payable) while they are already paid. My first question is how to change this mistake ? My second question is how to do end of year accounting for my company based on this data: expenses paid from personal account, expenses paid from bank associated with the company, and revenues. Thank you very much for your help. I will appreciate.
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Level 2

How do I enter business expenses paid by personal credit card?

How did you pay yourself back for the expenses that you paid for the business?  You mentioned that you had entered bills - that remains unpaid - if you paid yourself back already then find the transaction where you paid yourself back and change the account at the bottom of the check to Accounts Payable and use your name as the customer column.  Go to the bill that remains open and apply the credit that you will see to the bill. This should resolve the open bill.  I would follow the suggestions that I detailed above to account for personal activity.  Remember to not comingle business funds and personal funds.  Hope this helps! : )
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Level 1

How do I enter business expenses paid by personal credit card?

But what if I haven't paid myself back and they are still entered as unpaid bills? How do I get this off of my Balance Sheet and P&L because it looks as if my accounts payable is big negative number