Compant Credit Cards - The Book-keepers Forum (UK)

winkle · Veteran Member

Compant Credit Cards

winkle · Veteran Member

OK

Now I think it would be better to credit captal introduced and debit the necessary accounts for the transactions

Then when B pays the credit card, record it as drawings

Please can someone help, I feel in a right pickle! confuse

winkle · Veteran Member

yes I'm talking to myself biggrin

Right ....I think I have decided how to do it....

I use a bank account to make the payments to suppliers and other purchases made on behalf of company A. This will show as a liability account as it will always be a credit balance as Company B pays the balance.....leaving company A owing the balance on the bank account showing as a liability.

That way i don't need to enter every transaction from the credit card statement

I think that makes sense ....is anybody there?

Wella · Expert

Hi Lizzie

Fridays and weekends are always a bit quiet on the forum

I think I have got my head around what you are asking, so this is what I would do

	Comp A
When used	CR Credit Card

If used for business	DR Expense a/c
If soletrader	DR Drawings
If Ltd Co.	DR Directors Loan a/c

		Comp B
When paid	DR Credit Card	CR Bank
	CR Comp B a/c	DR Comp A a/c

If the companies are Ltds it makes a slight difference to the postings. I have also assumed the credit card is company A's and is not used by company B for any purchases.

If the client is a soletrader, when paid, you could post the payment out of company B as drawings and post to capital introduced in company A.

HTH
Bill

-- Edited by Wella on Saturday 30th of October 2010 12:15:08 PM

winkle · Veteran Member

Hi Bill

Thank you for your reply...

They are not Limited companies and it looks like that the cerdit card is the owners and is used for both businesses. Company B always pays the balance

I feel like I am going round in circles with this one

Company A=
Cr Credit card
Dr Expense
I would only post the business transactions

Company B=
Cr Credit card
Dr Expense
and when a payment is made to the credit card=
Dr Credit card with amount of expense in that month and
Dr Drawings with the remainder
Cr Bank

This is my first client...a bit trying to say the least!

Wella · Expert

We all having trying clients I think

You are right we covered something similar a couple of weeks ago

There are going to be several options to deal with this but I think the simplest is

	Comp A	Comp B
CC purchase	DR Expense	DR Expense
	CR Capital introduced	CR Capital introduced

CC paid		DR Drawings
		CR Bank

As there are two seperate companies involved it might be easier to leave it like this. Only enter the business purchases and leave out the personal use of the card. This way any excess payment made to clear the card will contra the capital introduced and mean less postings

Hope that makes sense

Edit: I would disregard the fact that a credit card is involved as it is not a business card and just treat it as if the client had paid cash for purchases and made a drwing to pay off his card

Bill

-- Edited by Wella on Saturday 30th of October 2010 02:35:14 PM

winkle · Veteran Member

That does make sense...and seems nice and tidy too :o)

I have already posted suppliers invoices in which have also been paid with the credit card....how would I match them off with the payment? That's why I thought of doing it as a credit card

I really appreciate your help Bill, I can't thank you enough

Lizzie

Wella · Expert

You could just DR credit card and CR Capital Introduced, to clear the balance on the credit card and move it to capital, then continue as in previous post.

I would suggest making a comment in the details box about what the transactions are, for all card transactions

In the previous example I kept things simple, what I usually do is have an account called Personal Credit Card and Cr card and Dr expenses and at the end of the month clear the credit card account by doing the above. I only do that so I can see at a glance personal payments, it's not a necessity.

Bill

-- Edited by Wella on Sunday 31st of October 2010 12:03:19 PM

winkle · Veteran Member

Thanks Bill

You're a star!

I have a whole year to get on with now and it doesn't seem as daunting now

One other thing though if you don't mind?.....I have just the one sage package at the moment and intend on rebuilding and restoring. Do ou know of any complications in doing this?
Company B only has one other year after this one so would be good if I could do them on the same programme

Wella · Expert

Hi Lizzie

I have done the same myself but it is not ideal. I was always worried that the data would corrupt with the constant backing up, rebuilding data, and restoring. Due to the cost of multi company licences with Sage, I moved to different software.

If you dont mind learning a new package and want excellent, value for money, multi company software for future use, try VT Transaction +. It doesn't have a lot of the unneccessary (in my opinion) bells and whistles of Sage, the interface isn't as pretty, and data entry is different but once you've found your way round it, it is easy to use.

If you are interested, you can down load a trial version from their website

http://www.vtsoftware.co.uk/tranplus/index.htm

Bill

Scrat · Veteran Member

Hello Bill,

Good suggestion, think I'll give the trial a try too.

Phil (McTankup as was)

winkle · Veteran Member

Thanks Bill

I am going to look into other software but just not right now. I don't have much time on these books and thought it best to stick to what I know for now

I have downloaded the trial for solar accounts and quickbooks but haven't really looked at them properly, I will look at your suggestion too. I like sage but I suppose that is because I am familiar with it....but I feel there pricing and licenses are just wrong!

Wella · Expert

Started to wonder what happened to you Phil, I noticed you had been deleted!!!

You will probably read from other posts, I am a die hard convert. To be honest, I didn't like VT when I first tried it out. I was a Sage user before, and was expecting it to be like Sage - it's not. Give yourselves a chance to find your way round it before you make a final decision.

Got to go now and compose an email to Philip Hodgson at VT and see if I can negotiate some commision LOL biggrin

Bill