I understand the use of credit cards is different to a supplier.
It is mentioned in the forum that a single transaction for all purchases can be placed or individually so as to correctly account for the expence type, later being my best option.
When it comes to the business paying me for the expences there is no option to pick and choose what purchases I want to be paid for. I have to pay each transaction seperately.
The expences could run over two seperate card statements and I choose only to pay my self back when I need to.
Is there a better solution.
Hello KP,
Are you talking about a situation where you pay for business expenses using your personal credit card, then later you are reimbursed by the business? If so, can't you record a single payment from the business to yourself to cover the total amount owed?
Thanks
Hi Mark,
Yes I am. If I record a single payment from the business to myself to cover the total amount owed how is the expence catagorised. I need to seperate in to fuel, subsistance, etc.
We had this conversation before. I use to class my credit card as customer and all worked out with the VAT, etc. This is however not the correct way to use credit cards in business as you pointed out. HMRC say, with credit cards it is the transaction date that counts not when payment has been made unlike customers that offer credit.
You state under - How to record a purchase invoice for a credit card purchase.
You can create separate transactions if you prefer, but you can also have a single 'Money Paid Out' transaction allocated to multiple expense accounts (ie. with one line per expense in the 'Allocate To Account' table).
If you create separate transactions (in my case 20-30 per month), I would have to pay each one individually as there is no function to group together as you can with purchase invoices.
If I group them together as you suggest above, this will allocate the expense correctly, but against what HMRC say because all the transactions will be under the same date.
Hi KP,
You record the expense category at the time you pay the merchant, not when you are reimbursed by the business.
My understanding is that HMRC will not mind if you record a single 'group' transaction at the end of the month instead of individual transactions throughout the month as long as it makes no difference to the tax returns you submit. However, I'm not an expert on this - I recommend you check with them.
Regards.
Hi Mark,
What do you suggest?
If I enter credit cards transactions individually = correct expense trail, but very time consuming.
If I enter as single group = no expense trail.
KP
Hi KP,
I would group the transactions once a month if this is permitted by HMRC, and keep the original receipts as evidence of the exact date of each transaction.
Regards,
