American Express in your books

Each Amex account becomes a liability on the balance sheet, usually named Credit card payable – Amex. Charges add to it and payments take it down. That holds for both kinds of card Amex issues. A charge card's balance is generally due in full each statement, but on any month end there's still an unpaid balance, and the company owes it.

In the March example, the $840 flight goes to Travel and the $160 lunch goes to Meals, each on the day it was charged. The card liability rises to $1,000. March's income statement shows $1,000 of spending even though no cash has left the bank yet.

In April the bank pays the $1,000 statement. That entry debits the card payable and credits cash, and it touches no expense account. If a credit card carries a balance and Amex adds interest, the interest is its own expense, kept apart from the spending it was charged on.

Statements rarely close on the last day of the month, so the charge date decides the month, not the statement. Tie the card payable in the books to the statement balance as of its closing date. Charges made between that date and month end should already be in the books too, from the card's recent activity.

A balance that won't tie usually means a charge is missing, a charge was booked twice, or a payment was coded as an expense.

This is accrual basis bookkeeping in its simplest form: the cost lands when it's incurred, not when it's paid. Brex and Visa cards follow the same pattern.