Accounting & Bookkeeping & Small Business Forum

[Guest]

I have a client that use a variety of credit cards sometime business sometimes personals and in top of that 2 employee use gasoline cards and differents supplier card. I am going crazy with this. Right now I am using the following accounts - credit "credit cards payable" (for each credit card) and debit (diesel, office supplies etc) my question is How do you account for a big expense when he is paying a small partial payment of the purchase ? "am I doing it the right way or there is an easy an better way ?"I appreciate your advise.

[Guest]

Credit card charges should be recorded on the date incurred, whether you're using cash or accrual accounting.

[Guest]

I agree with Bryan. Record the expense or fixed asset acquisition at the time of purchase. Payments on the charge accounts are like loan payments, just a reduction of cash and liabilities. And, if they use a business card and do not pay the full balance each month, then they will incur finance charges which would be a separate expense item to record.

I would try to persuade them to refrain from using personal cards for business expenses. In cases where they do this, issuing a check to them to reimburse them for the purchase, and letting them make actual payment on the account is probably the best way to handle those transactions. Just make sure you have documentation for tax puruposes.