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QuickBooks Tip: How to Enter Credit Card Charges

by Ruth Perryman 14. February 2010 10:01

Question: I am contacting you regarding a question on entering credit card expenses and paying credit card charges. I do use Enter Credit card charge for receipts I have. The amount does show up under vendor but not under credit card account, so I am not sure if it is correct. I believe there is a way to download you credit card charges automatically. But I am not sure how to do it. Also if it downloads automatically do I still have to classify charges to the correct expeneses clasification? Also, once I pay credit card through Write Checks options. Is QuickBooks knows to pay the charges under vendors since Credit Card does not show any balance and we only specify Credit Card under Expense tab when pay (not Vendor we pay). If you could help me clarify these question it would be great.

Answer:
Here are the steps for entering credit card charges:

1. Go to Lists > Chart of Accounts, click on the Account button, select New and setup a credit card account.
2. Go to Banking > Enter Credit Card Charges, select the correct credit card in the Credit Card box (if you have more than one) and enter your individual charges using the actual vendor paid, not the credit card vendor. Use an expense or asset/liability account in the Account box, do not enter the credit card account here.
3. When you receive your credit card statement, go to Banking > Reconcile and select your credit card account. Check off all the transactions on your statement.
4. Once the difference = $0, click Reconcile Now. You’ll get the option of either entering a bill or writing a check to make your credit card payment. It defaults to the full balance, you can change this on the bill or check. If you don’t want to enter a bill or check, select Cancel.

Think of your credit card account as being similar to your checking account only in reverse. Instead of having money in the bank, you owe money to the bank. The expenses charged to your credit card will show up in both the associated vendor records and your Profit & Loss reports. The entire unpaid credit card balance will be shown in the credit card account on the balance sheet. You can also see it by going to Lists > Chart of Accounts or Banking > Use Register.

Many credit card companies offer QuickBooks online banking. If yours does, you can setup your accounts by going to Banking > Online Banking > Setup Account for Online Services. You will still have to enter your expense accounts. QuickBooks will remember the previous expense account used for a particular vendor, but it's still a good idea to check and make sure it's defaulted to the correct expense account.

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Ruth Perryman - QuickBooks Specialist Written by Ruth Perryman, CMA, CFE, CFM, MBA, DPA (ABD)

Ruth is the president of The QB Specialists, an Intuit Solutions Provider that has helped thousands of businesses throughout the United States, Canada and even the Caribbean get the most out of QuickBooks since 1996. Ruth has over 20 years of industry experience, including 5 years as a Chief Financial Officer. She is an Advanced Certified QuickBooks ProAdvisor and a member of Intuit’s Trainer/Writer Network. She is also certified in QuickBooks Point of Sale and Enterprise.

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