USA Confused On How to Handle Account

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hello,

I have a small business without a business checking account. For one of my expenses, which is for web hosting expense, I need to know what to debit and credit. I pay for the expense with my credit card. The credit card, had personal charges on it before I started the business and get paid monthly not in full. I need to know how to account for the business charges that I have and pay with personal fund and not business funds.

Any help would be appreciated.
 
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Hello, Keith. Anything you pay for yourself should be considered a contribution to your business, so DR the expense account and CR Owner's Equity.

HOWEVER, you need to get a business checking account and fund it ASAP. (Side note: when you do this, you would DR the bank account for the amount you fund and CR Owner's Equity.) You should also get a business credit card if that's how you pay most of your bills. IF you should ever be audited or sued or anything else unpleasant, there's a concept called "piercing the corporate veil". I don't know where you're located and what your laws are, but in SC, we can form an LLC that separates our business liabilities from our personal assets. I'm a sole-proprietor, too, but I'm set up as a single-member LLC. If anybody takes exception to my LLC, my LLC's assets is all they get (if they win). If I were to pay all of my LLC bills from my personal checking account, the law sees me and my LLC as one (veil pierced) and anything conducted in the name of my LLC becomes my problem as well. And the LLC's assets which could be taken are my house, my car, etc. So I strongly suggest you look at setting up a business model, getting a state ID, setting up a bank account, etc. Consult your CPA if you don't know how to do this.

Under this model, you would fund your bank account, save up your receipts that you personally paid for and reimburse yourself (attaching the receipts as proof of course!). Yes, this means you wrote your company a check (for funding) and it wrote you one right back (for reimbursement) but it's very important to view yourself as two different entities for the reasons listed above.

All the best to you and your business!
 
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No disrespect but if you don't know how to do such a basic task you are not doing yourself or your business any favors by doing your own accounting / bookkeeping. Hire a professional to handle it all. There will be far more complicated issues than this basic one that you will not be equipped to handle on your own and you'll constantly be asking how to do them. Let a professional handle it all and sit back and work on growing your business
 

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