I've just started my own business (as a sole trader) and I have been using my own personal credit card to pay for some of the business exspencess.
In my accounts I have setup a "creditors" account call "Personal Credit Card", so I
Dr exspence account
Cr credit card.
Then at the end of the month I setup a bank transfer from the business account to my personal account, to the value of the credit card balance,
Dr credit card
Cr Bank
My quiestion is to do with what records I should keep. Should I be writng out a recipt for my self or writng a expenses claim form, or should I just keep a copy of my credit card statment and leave it at that?
Thanks
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You've got a lot of choices in your life. If getting out of bed in the morning is a chore and you're not smiling on a regular basis, try another choice.
I personally would keep it simple and just Dr the Expense, Cr Drawings. especially if your personal credit card is paid from your personal bank account.
Keep your credit card statements and receipts as proof.
I'm interested to see what others think but I wouldn't set up a supplier / creditor account either. As you're a sole trader you can't really be a creditor of yourself. So I'd
Dr Expense Cr Capital Introduced
With the payment of business expenses via personal c.card
Dr Drawings Cr Bank
With the "repayment" of the expenses
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Tony
Responses are intended as outline only. Formal advice should be sort from your Institutes Technical Department or a suitably qualified Accountant.
When I started my business (sole trader), I used the same system as Tony. I kept my credit card statement and also any receipts, invoices etc., associated to the credit card statement. A lot easier now I have business card etc.
