Home – New Forums Money matters Corporate credit card – paid off fully by EOFY?

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  • #994845
    JimGrey
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    Hi
    Quick Question.
    I’m accounting in Xero now.

    In Xero I can reconcile credit card transactions about 24hrs after they’re made. I’m still making EOFY purchases now on the company card.
    Do I also have to have paid these off the card by 30th June to claim them in this year? Or is it enough that I hold the tax invoice in my hand that is printed, say 27th June 2016?
    This shouldn’t be confusing, and yet I am confused.

    Thanks
    JG

    #1198729
    MyGreatIdea
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    No, you don’t have to have paid them off your credit card to claim the legitimate expenses in your accounting system. It’s based on the date of the expenditure.

    When the purchase is made, it goes into your expenses and affects the profit and loss. The balance due on the credit card sits in your balance sheet as a liability. Reducing your liability doesn’t affect your profit and loss.

    Wendy :)

    #1198730
    Easysmb
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    Hi James
    Wendy is correct.
    Any transactions on your credit card is considered as paid already and related expenses is deductible and GST credit can be claimed. And your credit card balance is booked as short term liability on your balance sheet. When payment is made, it is used to offset your credit card balance outstanding.
    If you are using Xero and auto feed is setup for this credit card, the credit card reconciliation is same as reconciling one bank account. Any transaction is considered paid already.

    “Or is it enough that I hold the tax invoice in my hand that is printed, say 27th June 2016?” For this question, it depends on whether your entity is on cash or accrual basis. If you are on accrual basis, then you can claim the related GST and expenses accordingly.

    Hope this helps.

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