Ltd company and prepaid CCards

cubix

We have gone from sole trader to Ltd and the account is saying everying bought/paid regarding company should be done via the company credit card and not cash. The problem is sometimes the lads need to go into the wholesalers and get something. When we were soletrader they would give me the receipt and I would give them the cash and simply put it in the file for the vat returns at the end of the month

Now we need to organise extra credit cards, does any know if the prepay ones can be taken out in a company name. As its a bit of hassle to get extra cards via the bank. Lads would need to go in and show proof of identity and I presume would then be issued with a CC in their name but belonging to the Ltd company.

Graham

I'm assuming the wholesalers aren't keen to give you a credit facility for this type of purchase, might be worth having a chat with them.

Do you know if there's a particular reason the accountant hasn't suggested a slightly more formal arrangement for cash purchases. A small petty-cash system might be appropriate, that's assuming previously you just took cash out of your own pocket to reimburse employees.

cubix

Need to be able to go to the localist wholesaler due to time constraints. Average purchase is usually less than €50.

Was hoping someone here would tell me why, account says it can cause problems with revenue if item was not bought with company credit card or if your cash receipt is not made out to company name as renvenue can discount the receipt, and over a course of a month we could have a few till receipts that dont have the option of making them out to a particular company name as the till just spues them out.

srsly78

I used to just use my personal card, then reimburse myself from the company along with wages. Then I got company card which makes it a lot easier.

Have never had a problem using personal card + company vat number for business purchase.

Bandara

Your accountant works for you, you buy whatever way is most convenient for you.

Cash or CC is irrelevant once you have correct receipts etc

cubix

I dont think she is trying to be awkard I presum she going on past expierience from revenue. As mentioned this did not seem to be an issue when we were a sole trader but according to her the brief for Ltd is alot more strick.

srsly78

Yes a ltd company has more complicated accounting, but it's still just a matter of retaining the correct receipts + records.

Corkbah

to me it sounds like your account was only trying to make life easier for themselves....or possibly save you money by making life easier for themselves. (more likely the first one)


if everything is done via the company credit card the accountant simply has to review the bank statement - if there are additional receipts it makes things a bit messier.

in an ideal world the accountant would be capable of making suggestions to you that would save you money - but that rarely happens nowadays.

cubix

Lads
Below is a reply from the accountant, as mentioned I dont think she is trying to be awkward but is simply looking out for problems that may come back to bite.
Coming from a sole trader what I find it hard to get my head around that revenue can kick up if the receipt is not made out to the company as this is not always possible when getting items from a retail shop.
Just looking to get feed back if anyone else here has had the same expierience.

"The Revenue do not care how the expenses are paid, what they care about is that ALL purchases clearly say the company name on them. If this is the case it does not matter if they are paid by cash. HOWEVER the problem arises if it is a Cash sale invoice and then has no traceability to the company. So by putting it on a company credit card, if it does not say the company name on it the Revenue may still disregard it as Vatable but at least you can justify that it is a company expenses. Dos this make sense?"

srsly78

As she says that's only for cash. As others have said above, record keeping (invoices) and receipts are what matters - your accountant confirms this.

I often use my personal card for buying company stuff online. Even tho it's my personal card I put the company down as the billing address, so the invoice clearly states it's for the company.

Bandara

I'm involved in the fuel business

Hundreds of people each day buy diesel off me for company/business vehicles, pay in cash and take the receipt, we have no way to put their company info on the receipt

Also loads pay on the company credit card for fuel and shop items combined, yet get a fuel only receipt, which means the receipt won't tally with the credit card statement.

Myself I buy loads of items for cash or CC for the different companies, and in 12 years, and having gone thru 2 full revenue audits I've never had any issue from revenue regarding how anything is paid for. And they have never queried why cash was used to pay for anything.

Is your accountant a small single person operation or a accountancy company ?

cubix

HT good to hear, she would be a small operator like ourselves.

Peterdalkey

There is no requirement for the purchasers name to be on a receipt, only the date, amount and vendors name, plus their VAT number if you wish to reclaim the VAT.
The accountants advice in this seem to be completely over the top...... overly windy is the nicest thing I can think of!!

Nuttzz

Some banks do debit cards on the current account, would you feel comfortable doing that? I know that somtimes the banks can be a bit off about issuing credit cards

srsly78

Oh they aren't off about it, but they do look for personal guarantees.... Even if your company has loads of money in it's account. But yes now we have debit cards so it should be more straightforward.

Avoid BoI credit cards like the plague... it's a completely seperate entity from BoI. This means an additional set of extortionate charges and zero help from the bank itself. They even charge for the ability to see the statement online.

dbran

Hi

Suppliers can put all sorts of names on an invoice but the bottom line is if it is a legitimate business expense it is allowable. That goes for VAT and also for income/corporation tax.

It is unlikely that the revenue would disallow a piece of expenditure for this reason alone and succeed in getting through a revenue audit.

Accountant is definately being over cautions.

Regards


dbran

Freepass

As a Finance professional myself, I applaud your accountant for trying to protect you from any ploy that the Revenue may use against you. I have seen what your accountant is describing at least 10 times since January this year.. If you are using wholesalers etc ask them for a monthly statement. this will match any receipts you have from paying in cash..

Your accountant is not being over the top but the Revenue Commissioners audit instructions to employees are crazy at the moment.