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Using QuickBooks® Credit Card Feature

Set up accounts for your credit cards —>
  1. Naming credit card accounts.
    1. You need a separate account in the chart of accounts for each credit card.
    2. Name them with the last 4 digits of the account number and then the type of card. For example, 1234Visa.
    3. You could also name them for the person they are assigned to, for example, 1234Mike.
  2. Fast and easy way to create the accounts.
    1. Starting from the menu at the top of the screen, go to Banking, Enter Credit Card Charges. Depending on your version, this command may show on the menu or it may be a step over under Credit Cards.
    2. If you have never set up a credit card before, you will be asked if you want to set one up now. Answer, yes.
    3. Type in your account name and press enter until you see a window appear similar to a check window.
    4. To add more credit card accounts, just type over the current account name at the top of the window and enter the new account name, press enter until you are back and the credit card window.
  3. The standard way to create accounts.
    1. Go to Lists, Chart of Accounts.
    2. Select Accounts at the bottom of the window. Choose New.
    3. Or you can use the keyboard shortcut, Control N.
Entering credit card charges —>
  1. To speed up the process, sort your credit card receipts into piles by credit card. Most credit card receipts list the last 4 digits of the credit card used somewhere on the receipt.
  2. Start from the drop down menus across the top, choose Banking, Enter Credit Card Charges.
    1. Create a new account if necessary.
    2. Fill in the form for each receipt basically as you would fill in a check form.
    3. If you have a receipt for a return or credit, just click the credit button for that entry. Be sure it is reset to charge for subsequent entries.
  3. If this is the first time you have used the credit card feature, you will likely have to enter many new vendors. This is a one-time thing for each vendor.
    1. Having the vendor names entered means that you will be able to search for these vendors.
    2. Entering each vendor and purchase allows you to make memos as needed and record complete purchase information for future reference.
  4. This may seem slower at first but you are really not doing significantly more work as you had to add up all the credit card information to get the totals to split on your checks. That will not be necessary any longer.
Paying your credit card
  1. The important thing to remember is that you are paying the credit card company for the balance due them.
  2. You are not paying the individual vendors, they were paid already by the credit card.
  3. It is best to reconcile your credit card prior to paying it, the reconcile feature will create the check for the payment.
  4. You can pay the credit card before you have time to enter the charges and reconcile.
    1. Enter a check to the credit card company and post it to a single account - the credit card account.
    2. If you pay the credit card online, you should still record the payment by entering a check. Use the confirmation number as the check number.
Reconciling your credit card accounts —>
  1. Credit card accounts can be reconciled just as bank accounts are reconciled.
    1. This will be easy to start if you have been paying your credit card account in full every month. Both your card balance and your QuickBooks credit card balance will be zero when you start to reconcile.
    2. If you are carrying a balance on your credit card, you will need to enter a starting balance to get going on reconciliation's.
      1. First determine if you have already taken the deductions represented by the existing credit card balance. If so, you should not record the starting balance as an expense and so double-dip on your tax deductions.
      2. If the balance on the card has not been previously recorded and the charges are all in the current year, you can just go back and enter the amounts as charges to bring your QuickBooks account up to date.
    3. If the balance on your credit card is from prior years, you should discuss how to handle it with your CPA.
  2. Once you are past the first month's data entry and reconcile, credit card reconciliation's will be easy.
  3. This method keeps your books accurate. Your balance sheet will now reflect the amount you owe in credit card debt.
Advice and tips provided on the Fathom Graphics website are not a substitute for advice from your CPA, tax preparer or attorney. We are not CPAs or attorneys and do not provide legal or tax advice.