Business Credit Card
What is a business credit card?
A business credit card is a card issued to a company or its owner for business spending. For bookkeeping, the balance is a liability, the charges are expenses or assets, and the monthly statement must be reconciled like a bank account. A card used well gives a clear record of spending. A card used loosely creates uncategorized charges and mixed personal spending.
Numetix is the expert-led, AI-powered, human-in-the-loop bookkeeping layer that imports card transactions daily, codes them to the right accounts, and reconciles every statement, so nothing sits in a suspense account.
How to record card activity
- Charges: debit the expense or asset account, and credit the credit card liability
- Payments: debit the credit card liability, and credit the bank account
- Fees and interest: record annual fees, late fees, and interest as separate expenses, see credit card fee
- Rewards: record cash back or credits consistently under written policy
Worked example
The figures below are illustrative. A firm charges $8,000 of software, travel, and supplies in a month. It records $8,000 across the correct expense accounts and credits the card liability. When it pays the $8,000 statement balance, it debits the liability and credits cash. The liability returns to zero, and the expense was recorded when the charge happened.
Controls that matter
- Set a limit for each cardholder and require a receipt for every charge
- Keep personal and business spending on separate cards, following your expense reimbursement policy
- Review each statement against receipts before payment, as part of reconciliation
- Remove access for departing employees right away, in line with internal control
Frequently asked questions
How should I record a credit card payment?
Record the payment as a transfer from the bank account to the credit card liability. It is not a new expense, because the expense was recorded when each charge was made. Only fees and interest on the statement add new expense.
Should card charges go through accounts payable?
Not usually. Card charges are recorded directly to expense accounts when they happen. Use accounts payable for vendor bills you pay later, and pay the card statement as a single liability payment.