Our company has a credit card to make purchases for the business and personal purchases. Since we do not want the business to pay for the personal purchases, we check the statement we receive each month and split the payment amount to the indicated personal and business accounts. We add all personal expenses and pay with the owners personal account and do the same with all business expenses each month.
The question is, when it comes to reconciling Quickbooks Online it has an option to import all credit card transactions but like I mentioned, not all transactions are business expenses so what do I do with the personal expenses? Do I delete them? Or which account do they go to?
Also, two different forms of payment are made to one credit card each month so how do I add that on Quickbooks Online because one payment is personal and the other is business?
I do not want it to be all mixed up!
Hopefully I explained myself well.
It's not advisable to mix personal and business funds. I'd be glad to share a few details on how you can straighten out your accounting books.
We encourage seeking help from your accountant. He/she can specifically help you on how to track and reconcile your personal and business transactions.
To add, I've got here an article that you can read on to learn more about mixed personal and business transactions:
If you have any other concerns, feel free to leave a comment below.
Mixing personal and business transactions in the CC account, whether the personal gets posted to QB or not, is considered commingling, and can cause problems with a court or various government agencies. Dedicate the CC to the business, even if it is a personal CC, the nature of the transactions determine commingling.
How this is handled really depends on how the company is taxed, in the explanations below, the word *account* is either equity draw if you are taxed as a sole proprietor or partnership, or an asset account (due from [name]) if it is taxed as a c- or s-corporation
Personal expenses get posted to the *account* when you list them in QB
When you make a payment in QB with personal funds, first you make a deposit in a cash type account and use the equity investment account or the due from account as the source account for the deposit
Then you post two payments to the CC, one from cash in the amount deposited, the second from the business bank account