One of the items that sometimes is overlooked are credit card purchases. If you have several credit cards, it is probably best to designate one of the cards for the business. However that can sometimes be difficult, especially if you get some kind of reduced interest offer on a card that you want to use. If you use a credit card regularly for business expenses, then you want to set this up as a liability on your books. You would set up an account such as Bank X Credit Card.
In Quickbooks, there is a separate function to enter credit card charges. You enter the date, name of the retailer and the amount. If you have more than one card you also select which credit card account you are using. Your entries should then reflect your credit card balance. Generally I enter the charges based on the statement. You also want to be sure to record the interest expense and any other charges the card may be charging, such as credit life insurance, which a lot of credit card companies have a way of sneaking in.
Next, what if I am also using the card for personal expenses?
By Alamo Bookkeeping Associates