💡 This article explains how to record your Holvi Business Credit Card transactions in your accounting.
Please note, this article does not replace the official guidance of a qualified accountant in Finland or Germany.
Two main accounting methods
Holvi customers use either single-entry (cash-basis) or double-entry accounting. As a brief explanation…
Single-entry
In single-entry accounting, income and expenses are recorded in the accounts when they happen, and the source of the money is not tracked.
Double-entry
In double-entry accounting, expenses are recorded in two accounts when a transaction takes place: one recording the expense, and another recording the source of the money.
For Holvi credit card transactions, the source of the money is the credit account – so the record would look like this:
+ 300 expense |
- 300 credit account |
Sample credit card transaction
As an example, imagine you go on a business trip and make spend €50 + 24% VAT on a taxi journey.
- €2 interest, 0% VAT - €10 credit card monthly fees 0% VAT = €62 repayment, 0% VAT |
On the main account (that is, your standard Holvi business debit account), there would be a single transaction of -€62 for the repayment.
NotePurchase, interest, fees and repayment would typically take place in different months – and accounting would therefore be done in multiple stages For the sake of simplicity, we have done all the accounting in one go for this example. |
Single-entry accounting for credit card transactions and repayments
For single-entry accounting, you would record the purchase (€50) as an expense with 24% VAT, plus the interest (€2) and fees (€10) as additional expenses with 0% VAT. Repayments would not be included in your accounting at all.
One way to manage this is to view your credit card statement and carry out your accounting exactly as you would for your main account: record each transaction on the date it occurs, and skip the repayments on both your main and credit accounts.
Double-entry accounting for credit card transactions and repayments
For double-entry bookkeeping, you would record the purchase (€50), interest (€2) and fees (€10) in your books as:
- €50 credit account |
+ €50 expense account ‘travel costs’ |
- €2 credit account |
+ €2 expense account ‘credit interest’ |
- €10 credit account |
+ €10 expense account ‘credit fees’ |
The repayment would be booked as:
- €62 debit account |
+ €62 credit account |
Depending on your company’s chart of accounts, each credit account might have a separate account number, and credit interest and fees might go to a generic expense account.