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Personal-Card Business Expenses — Reimbursement Workflow

Status: Draft 2026-04-20. Pending Austin's sign-off (and Pearce's confirmation that the entries-vs.-distributions approach below is consistent with his preferred treatment).

The situation

Austin charges some legitimate business expenses to personal credit cards "to earn points" (his own words, 2026-04-20). Per the 2026-04-20 CC sort decision, those personal cards are archived in the RFH Xero org — they don't get reconciled card feeds.

But the business expenses themselves still need to land on the right entity's books, with the right COA code, the right Entity tracking, and the right Asset Class tracking. Austin keeps receipts in a folder, so the documentation exists; the question is just the booking mechanism.

Why this matters

  • Missing these expenses understates entity-level expenses → overstates entity-level taxable income → potential overpayment of tax.
  • Booking them without a paper trail looks like commingling under audit.
  • Booking them through the (now-archived) personal card accounts in Xero looks like the business owns the card, which it doesn't.

The proposed workflow

Use Xero's expense-claim / owner-paid-expense pattern, with the Owner Contribution equity account as the credit side.

Per-receipt entry

For each receipted business expense charged to a personal card, post a Bill to "Austin Renfroe (owner-paid expenses)" as the contact, with line items coded by entity and category:

Date:           date on the receipt
Contact:        Austin Renfroe (personal — owner-paid)
Reference:      personal-card-{last4}-{date}
Line items:
  - Description:    description of expense (e.g. "Frigotek HVAC service call, Casa Moksha")
    Account:        e.g. R&M — HVAC (when COA is finalized)
    Tracking[Entity]:      RHG (or whichever applies)
    Tracking[Asset Class]: Hotel (or whichever applies)
    Amount:         from receipt, USD-converted at receipt-date FX if applicable
    Tax:            None (US side) or IVA 16% Purchase (Mexico side)

The bill does not get paid through a bank feed — instead, it gets settled via a journal entry once a month (or a quarter, or annually — see cadence below):

Dr  Accounts Payable — Austin (owner-paid bills)   [sum of bills for period]
Cr  Owner Capital Contribution                     [same]

The economic substance: Austin paid these expenses with his personal money, so the entity owes him → he's effectively contributing the receivable as additional capital. (Alternative: distribution of the same amount, then re-contribution. Same end-state, more paperwork. Pearce to weigh in if he prefers either.)

Cadence

Monthly during close. Austin pulls receipts from the folder, sends them with a per-receipt note (entity + brief description), Claude or the bookkeeper enters them as Bills against the owner-paid contact, then runs the settlement journal at month-end.

If receipt volume is low (<10/month) annually-at-close is acceptable — but recovery of basis for the contribution is cleaner monthly.

Setup needed in Xero

  1. Contact: "Austin Renfroe (owner-paid expenses)" — purpose-built contact for this workflow only. Not Austin's personal-name contact for any other purpose.
  2. Equity account: confirm Owner Capital Contribution exists (or create it under the EQUITY type). The current default-template chart has account 3000 "Owner A Drawings" / 3001 "Owner A Funds Introduced" — Funds Introduced is the right one.
  3. AP sub-account (optional): a dedicated Accounts Payable — Owner line so the period-end settlement journal moves a clean balance. Optional; can also use the main AP account with the contact as the dimension.

What this doesn't cover

  • Pre-2026 charges. Austin has receipts going back to entity formation (presumably). Bringing those into Xero requires a separate historical pass; for now, the workflow is forward-looking from the next monthly close.
  • Travel that was personal-and-business mixed. Standard "primary purpose" tax rule applies — fully personal trips don't come into RFH at all; mixed trips need allocation. Pearce's call on the methodology.
  • Statutory employer reimbursement plans. This isn't an accountable plan — it's owner-paid expense / capital contribution. Austin is the owner, not an employee. (For actual employees of RHG who use personal cards, a different mechanism is needed.)

Open items

  • Austin to confirm whether annual-at-close or monthly is the preferred cadence.
  • Pearce to confirm capital-contribution treatment vs. distribution-then-recontribute.
  • Once cadence is set, build a Claude-runnable script that turns a CSV of (date, entity, COA-code, amount, description) into a batch of Bills via the Xero API.
  • Document the historical-receipt backfill as a separate one-time project once forward-looking workflow is stable.