how can I reconcile a credit card account when owner charges personal bills along with business on same credit card and I do not have their personal information. Same with payment I do not always have record of their payments . The only information I have is what is on credit card statement. If I just enter charges & payments on statement what account should be used to separate business from personal .
Is it necessary to reconcile credit card accounts.
create an expense account for the personal bills. However if they use their own money to pay the bills I would use that to offset the personal bills.
If you don't reconcile the credit cards how will you know if someone has been using hte card outisde the company?
What type of business is this? If it's a sole proprietorship, then the personal charges should go to an owner's equity or owners withdrawal account.
If it's a corporation, then they should probably go to a Note Payable/Receivable - Shareholder account.
You don't want these listed as an expense. They would give the owner an incorrect picture of business expenses and would need to be separated out come tax time.
I think it is a great idea to reconcile credit card accounts. If the bill isn't paid in full every month, it can be difficult to figure out what expenses are being paid on each payment.
Also, it's a good idea to keep the cc liability account updated, especially at end of year, since charges before year end are deductible on the tax return even if they haven't been paid yet.
Would like your input on how I entered cc charges and payments. Have no idea if ok
Total bill was $1586.15 - 617.67 - Company charges which were in Acct.Payable
968.48 - Personal charges (I [posted them to Owner's draw)
Posted payment to Credit card co. from the Company checking account from which the bill was paid.
I assume when owner pays the 968.48 I would deposit back to checking account and post back to owner's draw account..
Will appreciate a response
Do you need to enter the charges to accounts payable? Consider setting up the credit card as a liability account as "credit card" type. All transactions are entered here thus streamlining the steps taken to enter these transactions. Personal transactions could also be posted to this account and the contra a/c would be owner's draw. Another alternative to the owners acct would be to set up a receivable acct- "Due from ........" "Advances to ......." Any balance unpaid at year end are then transferred as a draw.
By using the credit card route your outstanding balance could be reconciled to the credit card statement (you can use the reconcile function). The payment posted to this account should zero out the balance, provided no other transactions were posted. However, as indicated the reconcile function works really well.
Reimbursed payments from the owner would reduce the "Due From a/c". This also provides an current outstanding balance should you need to provide the detail to the owner.
