Credit card expense or supplier invoice by credit card - The Book-keepers Forum (UK)

krazykev · Veteran Member

Credit card expense or supplier invoice by credit card

RobH · Expert

Hi Kevin,

I'm not sure why you create yourself as the supplier, or is it not a company card but a personal card? However I always create a supplier, eg LLoyds TSB Credit Card and post virtually all entries fom the credit card statement in one go (Having attached the relevant receipts to the statement). If you particularly want to have a separate suppliers account for the printer say, then thats fine, I'd just write P/L (for purchase ledger) next to the item on the statement and pay this from 1240 credit card account. Then you just need to allocate the other payments. I find this the easiest way to do things personally.

Rob

krazykev · Veteran Member

Hi Rob,

that makes sense and thought that would be the answer. Just wanted to know if that was the right way and you have confirmed it for me.

Thanks for your reply - it's appreciated.

Kev

Flex Accounting Services · Senior Member

Hi Kevin, there are a couple of ways this can be done. You say it's a company credit card you are using. If this is the case then I'd have a separate supplier account in your accounts for this credit card. Keep your receipts throughout the month for the items that you have paid on the credit card, then post them all as purchase invoices in effect, obviously posting the individual receipts to the relevant p & L code. Then you will have a total balance outstanding for the credit card supplier to the value of the credit card statement (hopefully !!). Then when you do your bank rec, just post the DD/SO/payment off the credit card to the supplier account.
Sometimes there could be a little difference though due to timing differences, if for eg, you buy something the last day of the month, this expense needs to go through the P & L for that particular month but this wont be on your credit card statement til next month (thats my experience in some cirumstances anyway). Therefore your supplier account may always have some of these "timing difference" amounts.
Sorry, just seen that I've waffled on about here. Hopefully you get what I'm saying !!

krazykev · Veteran Member

Thanks Beverley,

I undertand your reply. Thank you. That seems a good solution but still has a small limitation. How do you isolate a particualy supplier that you always by credit card, as even if the supplier in question had their own supplier account, their invoices would be posted to the credit card supplier account along with other credit card purchases?

Kev

Flex Accounting Services · Senior Member

Yes that sounds sensible Kev, otherwise like you said before it would get messy if you put the purchase invoices under the separate supplier account then pay them by credit card. The alterative way is (if you want to post the invoice to the supplier acount as opposed to the credit card supplier account, is post everything from the credit card statement to the credit card supplier, post your invoice to the 'other' supplier, then when it comes to your bank rec and the posting of the credit card payment, you will just be posting it to these 2 supplier accounts rather than 1.
Bev

krazykev · Veteran Member

Hi Bev,

sorry which part sound sensible? I'm a bit confsed by your reply.

Aren't these the same thing?

"it would get messy if you put the purchase invoices under the separate supplier account then pay them by credit card"

"is post everything from the credit card statement to the credit card supplier, post your invoice to the 'other' supplier"

Flex Accounting Services · Senior Member

Hi Kev,
Basically you've got 2 options :
1 - post everything to the credit card supplier from the credit card statement as Rob also mentioned, then when doing the bank rec with regards to the credit card payment, post the full amount to the credit card supplier.
2 - split the purchases bought from the credit card and post anything you already have as a supplier to that account then the remainder to the credit card supplier account. Then when doing the bank rec, split the payment over both of the supplier accounts (or more if you have more suppliers paid by credit card and you have posted the purchases to them).

Hope this makes sense

krazykev · Veteran Member

Got it! Thanks for clearing that up.

Kev

GF · Newbie

This thread has helped me no end. thank you.
I do have one question though. I took out £100 from the ATM machine using the company credit card to cover petty cash. So on my credit card statement it shows £100 ATM and £3.00 charges.
(Do I eneter it as any other credit card payment?
Please can you advise how and where to I enter the £100 and £3 (Im new at sage and new on this forum, so sorry if this is a stupid question)

Stardoe · Guru

Hi there,

I would post the £100 as a transfer from the credit card to the petty cash account (i.e. credit credit card and debit petty cash) and post the charges as a bank payment from the credit card account to bank charges nominal (7901 in my Sage).

Hope this helps

Pauline

GF · Newbie

Hi Pauline,
it helped and I have taken your advice. Much appreciated.

just ran into another issue (so sorry for the questions)

I take AMEX payments on my internet store.
invoice to customer £79.96 - checked the merchant services side and £79.96 was there howeveractual payment into my bank account £75.77

on my sage I can't put against my internet customer 'paid in full' do I raise a credit note? but I am not crediting my customer, this is the % AMEX take from me for the privilege of me having this facility.

thanks again.

Shamus · Forum Moderator & Expert

That's basically the equivalent of commission being taken before you get the payment.

The double entry would be

Cr Sales £79.96
Dr Bank £75.77
Dr Merchant services £4.19

The sale is still £79.96 but you have the expense of the Merchant services payment.

The confusion I can see it that it is taken before you see the money but it still needs to be recorded through your books as though the payment was received in full and the Amex payment that was taken at source should be recorded as though paid by yourself as above otherwise your books won't reflect the commercial reality of the scenario.

HTH,

Shaun.