USA Personal accounts used for business

[Tybow759]

I have started a new job working for a man who owns many apartment buildings. I am running the show. The only problem is that he has been doing it by himself for the past year and not keeping track of his financials very well. Now he would like for me to go through the past year and get everything organized into QuickBooks so that he can present the numbers to his tax accountant.

I am not an accountant, I know the basics of accounting, but it is not as helpful as I would like in this situation. Right now I am having difficulties figuring out how to enter business transactions into QuickBooks that he made on his personal credit cards. He hasn't reimbursed himself for any of these charges from the business account so I don't know where to deduct the money from in order to have my business accounts balance. These are charges that he wants accounted for on his taxes though.

Any ideas?

 

[bklynboy]

You should set up a payable from the business to his personal account as the business will incur the expense. In other words, offset the expense with a liability to his personal account.

 

[The Finance Writer]

The best idea I use to fix situations like this is to have the taxpayer use one credit card for business expenses only. This allows you to set up the credit card in QuickBooks, enter credit card charges, balance to the credit card statements, and pay entire credit card bills from the business bank account.

Even if the credit card is occasionally (accidentially) used for some personal purchases, just enter those in QuickBooks using the account for personal draws instead of an account for any business expense.