Set it up as a liability
In your accounting software, create the card as a credit card account type. Charges appear as expenses with the credit side on the card. When you pay the statement from your bank, that payment is a transfer from the bank to the card, not an expense.
The most common error is categorizing the payment as an expense as well. The result is that every purchase appears twice, once when charged and again when paid.
Entering charges
Connect the card feed or import the statement. Review each charge, assign the category, and attach receipts. Charges that are personal go to owner draws or a due-from-owner account, not expenses.
Watch for recurring subscriptions. Cards often hide small monthly charges that nobody uses anymore. A quarterly review of recurring charges is worth the time.
Payments, interest and fees
Record the payment as a transfer. Interest charges and annual fees are expenses, usually in an interest or bank fees category. Late fees too, though ideally there are none.
If you pay only part of the balance, the rest stays as a liability. Make sure the balance in your books matches the statement closing balance.
Rewards and refunds
Cash back and points are treated differently by different advisers. Cash back received often reduces the related expenses or is recorded as other income. Ask your tax preparer how to treat it in your case rather than guessing.
Refunds from a vendor show as credits on the card. Enter them against the original expense category so your totals are not overstated.
Reconcile every month
Use the statement to reconcile. The ending balance in your books should equal the statement balance. Differences come from missing charges, duplicates or timing. Do not just force a match with an adjustment.
If several people hold cards, give each one a separate card or label. Require receipts within a few days of purchase. It prevents a month-end scramble and keeps spending visible.
Handling disputes and chargebacks
If you dispute a charge with the card issuer, keep the original expense in the books until the issuer actually credits your account. When the credit appears on the statement, enter it against the same category as a refund. Record notes about the dispute and the date, so that when you reconcile you can explain why a charge and its credit appear in different months.
If the dispute fails, the charge simply stays as an expense, and you may need to pursue the vendor directly.
Keep a simple monthly checklist: feed reviewed, receipts attached, personal items moved out, statement balance matched, payment recorded as a transfer. Five checks, ten minutes, and the card stops being a source of surprises at year end.
Common questions
Should I use a personal card for business?
It is better to keep business on its own card. If you do mix, record business charges as owner reimbursements and keep receipts.
Where does a payment to the card go?
It is a transfer from your bank to the card account. It is not an expense.
What if the statement date is mid-month?
Reconcile to the statement date. Charges after that date will be in the next statement.
This guide is general information, not tax, legal or accounting advice. Rules, fees and due dates change; check with the IRS, the NJ Division of Taxation or a licensed professional for your situation.