Tuesday, October 29, 2013

PCLaw and Credit Card Purchases

 How you enter credit card purchases made on behalf of your firm, depends on some variables:
  1. Is this a personal card or a business credit card, where most, if not all, purchases are business related?
  2. Do you make a lot of business purchases each month, or only a few?
  3. Will you pay the credit card company directly? Or, will you be reimbursed, and you will pay your personal credit card?
For a just a few purchases, you can write a general cheque for the total amount, account for the HST, and itemized the expenses and G/L accounts in the lower portion. Post any personal amounts to Draw. Make the cheque payable to yourself or the credit card company as is applicable.

If you make a lot of purchases each month, you can download a csv (comma separated values) (Excel) from most credit card websites. You can then calculate the total purchases for each expense category, then enter a general cheque as above. Save your worksheet with your bank records, as the purchases are itemized here, with only the category totals being used for the cheque. Do not forget to calculate for HST too.

If the majority of purchases are business related, it is usually easier to post personal items to the drawings account, and the pay the entire credit card bill with one firm cheque.

I like to add a credit card general bank account for those clients that are higher volume purchasers. I post the Excel sheet on the statement date. I then do a General Bank to Bank transfer on the payment date.

As always, I invite your comments and suggestions for future post topics. Next Posting – How To Account For Change Made From Petty Cash For PCLaw Receipts.