by Jim
(Carlsbad, CA, USA)
Inter-company Recording Keeping
I have a client that his financial records for his business and his personal are kept in 2 different QuickBooks (QBs) files. He just changed to a bad practice: Using his business card 90% of the time to purchase personal items. To boot, he pays for the credit card out of the business. He has an AMEX card designated strictly for his business, but he's chose to use his Citicard Visa as the primary credit card.
The personal records have multiple class codings as the client is very particular about who pays for what between he and his wife. So, transaction entries can be intense in his personal recordkeeping.
Situational problem: He has several rentals and when the business credit card is used to purchase personal / rental property items, those need to get logged in his personal QBs file and class coded. Since the majority of the transactions are personal, I've decided to enter them in his personal QBs file.
Caveat: The personal use of the credit card can be 75 - 100 personal transactions per month and I want to reconcile it in the personal books.
Question: I've set up the Citicard account and all credit card charges are entered in the personal books. In order to reconcile this account, I've set up a Clearing Account and use that to pay the credit card (reminder credit card is paid w/business funds and in separate QBs file). Then I enter a bill in the personal books to reimburse the business and the offsetting account is the Clearing Account - in order to zero it out. When distribution funds from the business are deposited into the personal books, the bill gets paid and transaction is complete. Is this a good practice / use of the Clearing Account? Or does someone have a better suggestion?
Thank you in advance for your assistance!
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