Company expense? - an invoice paid from the owner's personal account

Company expense? - an invoice paid from the owner's personal account

 

 

Question:

Hello, I had to make a down payment to UL, but instead of my company account, the amount was paid from my personal bank account. The company to which I made the payment issued an invoice. Can this payment be recognized as a business expense?

Thanks!

 

Answer:

Hello,

Company expenses are recognized on the basis of invoices received. Once you have an invoice you have a recognized expense. The payment is a settlement between the parties and takes into account the cash flows, not the costs of the company. After you post the invoice to your business, you will be credited with the expense of the company and will have an obligation to pay the invoice. Once not paid by the company, the debt will remain open. With a document for the transfer made from your personal account, you can close the debt of your company to the supplier, but there will be an obligation to you as an individual (the individual has paid the debt to your company). To close this obligation, you will need to transfer the amount from the company account to your personal account. For each of these actions, appropriate accounting operations must be taken.

We hope we have been helpful.

Greetings!