Getting started paying business expenses
I just started my home inspection business. I paid for the classes and equipment needed to start the business on my personal credit card. How do I use the income from my business to pay that card back? Do I write myself a check and then pay it from my personal account or do I pay it straight from the business account? My business is an LLC, and right now I am the only employee.
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So you've paid business expenses with a personal credit card? This is something that a lot of small business owners do, especially just starting out.
I'm not sure what kind of accounting system you have right now, if any. But here's what you should do.
You need to have the business pay for those expenses, and you can do this 1 of 2 ways.
If you can pay the amount in full, write a business check to you for the full amount. You personally will then pay your credit card bill in full.
Post the payment in your check register, and break it out for what you've bought.
Cash in Checking..................$250
--To pay owner back for purchase of a class and equipment bought on a personal credit card.
Keep a copy of receipts and/or the card statement in your accounting files for this check.
If your business cannot yet pay you back in full, I would post this as an owner contribution, then pay yourself back as you can.
Post the 'contribution' as such:
--To record the owners contribution of training and equipment purchased personally.
Then, when you can make a payment, write a business check to yourself and post like this:
Cash in Checking................$75
--To record payment to owner on purchase of supplies and equipment. $175 still due owner.
And that's it!
I hope this helps.