Home Forums Money matters Proper way of billing company’s expenses

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  • #1000524
    Perugia
    Member
    • Total posts: 1

    Hello,

    Happy to (finally!) join this forum. Might be a silly question, but what is the best way of accounting company’s expenses if they were paid from a personal account?

    Say you are director / owner of the company and you’ve made a payment using your “personal” card for something that is for your business. Purchased a necessary tool, paid to a service provider, you name it.

    Questions:

    1. From taxation perspective, is it detrimental if you pay yourself back from company’s bank account?
    2. How this transaction should be reflected in your personal and company’s EOFY tax returns?

    If this matter – for the tax return, I will most certainly engage an accountant.

    Thank you and again, glad to become a member of a entrepreneurial community.

    #1224657
    Dave – FS Concierge
    Moderator
    • Total posts: 2,526

    Welcome to the forums [USER=120461]@Perugia[/USER]! Hopefully some of our members can help you out.

    Dave

    #1224658
    Anonymous
    Inactive
    • Total posts: 8

    Hi Perugio and welcome to the forum.

    You should definitely pay yourself back through your company bank account. Make sure you keep the receipt as proof of purchase.

    The purchase will be treated as a company expense for example it could be a subscription or a work tool. The expense will be deducted from the revenue your business has made for your tax return.

    There is no impact on your personal tax return because you paid yourself back in full.

    Sometimes the business expense could be a capital asset like new machinery and this is then taken to your balance sheet as an asset .

    I hope this helps and best of luck with your business.

    Chris

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