How to Pay and Record Credit Card Bills in QuickBooks
You have flexibility in how you choose to record and pay your credit card bills in QuickBooks®. The decision is based on your own circumstances because several ways can be appropriate.
Options for recording credit card expenses include the following:
- Enter a bill to the credit card vendor, summarizing the total charges on one bill and entering a separate line for each expense account amount.
- Enter individual credit card charges. From the menu bar, select Banking, Enter Credit Card Charges. You might be prompted to add a credit card account to QuickBooks.
- Use the QuickBooks Online Banking feature and automatically download your credit card charges and payments directly into your QuickBooks data file. Not all credit card providers offer this functionality. To see whether your card offers this option, select Banking, Online Banking, Participating Financial Institutions from the menu bar.
Options for paying your credit card bill include the following:
- If you selected to enter a bill to your credit card vendor, pay the bill as you do other bills, paying it partially or in full.
- If you selected one of the other two options, you need to create a vendor bill or check and in the Account column of the transaction assign the Credit Card type account you previously recorded the transactions to. The vendor bill simply decreases the balance owed on the credit card liability account.
The cash basis Balance Sheet might show this credit card payment amount if it is not paid by the date you prepare your financials.
Have you ever found that QuickBooks users assign a different expense account each time they create a check or bill to pay for costs of the business? This can make reviewing your specific expenses for the business less accurate.
QuickBooks offers two choices with the Automatically Recall Information preference (select Edit, Preferences from the menu bar and select the General—My Preferences tab):
- Automatically recall last transaction for this name—Recalls both the account and the previous amount.
- Prefill accounts for vendor based on past entries—Recalls only the account(s) used and will not recall the amount.
A more efficient process is to assign up to three default chart of accounts to each vendor record. To add these accounts, follow these steps:
- From the Home page, click Vendors to open the Vendor Center.
- Select the vendor to which you want to assign accounts, and click Edit Vendor to open the Edit Vendor dialog box.
- Click OK to close the New Feature message if it displays.
- Click the Account Settings tab. In the fields provided, select the desired account(s) from the drop-down list.
If you rarely use the additional accounts, you might want to consider adding them only when needed. All newly created transactions include up to the three lines assigned. If these lines are not removed, they result in blank lines of data in many reports.
The selected accounts will override any preference setting for Recall or Prefill and will instead insert these accounts automatically on a Write Checks or Enter Bills transaction. This is just another method you will find to help you keep your accounting accurate.
From Laura Madeira’s QuickBooks 2013 In Depth