Recording Credit Card Charges
If you use QuickBooks for your accounting, I suggest you use the following method to record credit card charges, especially if that is your primary payment method. This method is especially useful if you do not pay your credit card bill in full every month. Here is the best way to record charges:
1. If you have a newer version of QB, there will be an icon on your main QB page that says "Enter Credit Card Charges" or to get to it manually, you can click on Banking in the top menu, then Enter Credit Card Charges.
2. Pick the correct credit card from the drop down menu at the top. Make sure the correct bubble is checked for a Charge or a Credit.
3. Fill in the Purchased From (you can select from your current list of vendors, or add a new one). Anyone you pay, especially for services, should be a Vendor. If it is someone you pay for services, please make sure you set up the vendor as eligible for a 1099, even if you don't have their ID number right now, you can set it up later. This will be critical at year end when you need to produce 1099s.
4. For the date, use the date of the transaction, which should be printed on your statement. Type in the amount of the charge, and a memo if you want to add more detail.
5. The Account field is also very important to your accounting. Most of what you charge will be expenses, however, if you are purchasing equipment, furniture, software, computers, etc. that cost over $500, you will need to pick a Fixed Asset account. These items need to be classified this way so that you can take a deduction for the depreciation at year end.
6. The other great thing about recording your charges this way is that you can code the expense to a particular Customer (or Job) and it can be billed out later. You can also classify your purchases by Class if you use that feature.
Here is a screen shot of the Enter Credit Card Charges screen in QB 2006:
I have found this to be the best way to record all your charges and keep track of your credit card balance. It also allows you to "reconcile" your credit card every month when you get your statement. When you make a payment, simply code it to the account for the Credit Card and it will get recorded in that register as well, and be reflected in the balance. This is a helpful, useful, clean way to record your expenses and other charges. Plus, if you pay vendors using this system, you can keep track of what you have paid them and make sure you don't overpay.
If you have any additional questions on this process, or any other accounting issues, please leave a comment here or e-mail me directly at teresa@winning-edge.net. I look forward to your comments and helping you succeed in your business.
1. If you have a newer version of QB, there will be an icon on your main QB page that says "Enter Credit Card Charges" or to get to it manually, you can click on Banking in the top menu, then Enter Credit Card Charges.
2. Pick the correct credit card from the drop down menu at the top. Make sure the correct bubble is checked for a Charge or a Credit.
3. Fill in the Purchased From (you can select from your current list of vendors, or add a new one). Anyone you pay, especially for services, should be a Vendor. If it is someone you pay for services, please make sure you set up the vendor as eligible for a 1099, even if you don't have their ID number right now, you can set it up later. This will be critical at year end when you need to produce 1099s.
4. For the date, use the date of the transaction, which should be printed on your statement. Type in the amount of the charge, and a memo if you want to add more detail.
5. The Account field is also very important to your accounting. Most of what you charge will be expenses, however, if you are purchasing equipment, furniture, software, computers, etc. that cost over $500, you will need to pick a Fixed Asset account. These items need to be classified this way so that you can take a deduction for the depreciation at year end.
6. The other great thing about recording your charges this way is that you can code the expense to a particular Customer (or Job) and it can be billed out later. You can also classify your purchases by Class if you use that feature.
Here is a screen shot of the Enter Credit Card Charges screen in QB 2006:
I have found this to be the best way to record all your charges and keep track of your credit card balance. It also allows you to "reconcile" your credit card every month when you get your statement. When you make a payment, simply code it to the account for the Credit Card and it will get recorded in that register as well, and be reflected in the balance. This is a helpful, useful, clean way to record your expenses and other charges. Plus, if you pay vendors using this system, you can keep track of what you have paid them and make sure you don't overpay.
If you have any additional questions on this process, or any other accounting issues, please leave a comment here or e-mail me directly at teresa@winning-edge.net. I look forward to your comments and helping you succeed in your business.
Interesting,
This is a great way to record various credit card charges...
Thanks for writing about it
Reply to this
nice article in informative as well. for few of people like me this article is really helpful.
IDCards Printers
Zebra ID card Printers
Magic ID card Printers
Reply to this
This helps in managing credit card account and monitor credit charges.
Reply to this
credit card holders should learn how to monitor their payment transaction especially when they have payment delays. It's great that such program exist so we can track the credit card charges.
Reply to this
very informative. I think that is a very useful tool to to have a record all the charges in our credit cards thanks for sharing
Reply to this
it's really cool you can easily track down the charges on your statement of account.
Reply to this
that's great information. I really like it. Thanks for this useful information
Reply to this
this new credit card act could be understood as not so good news for a few college students mainly because it would be much more harder for them to get a student credit card however let us check out the benefit of it. A credit card can assist a student understand true meaning of becoming responsible but let's not neglect that many people who suffered a bad credit score due to wrong credit card use. Keep in mind how you manage your account can affect your credit history.
Reply to this
Thanks for taking the time to share this, I feel strongly about it and love learning more on this topic. If possible, as you gain expertise, would you mind updating your blog with more information? It is extremely helpful for me.
Reply to this
Nicely presented information in this post, I prefer to read this kind of stuff. The quality of content is fine and the conclusion is good. Thanks for the post.
Reply to this
Great work dude, u gave nice post to us. Actually google made searching of information easy on any topic. Well keep it up and post more interesting blogs.
Reply to this
This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free.
Reply to this
Really appreciate your work,quiet informative so as useful.
Reply to this
Pretty good post. I just stumbled upon your blog and wanted to say that I have really enjoyed reading your blog posts. Any way I will be subscribing to your feed and I hope you post again soon.
Reply to this
wanted to thank you for this excellent read!! I definitely loved every little bit of it. I have you bookmarked your web site to check out the latest stuff you post.
Reply to this
Very handy to include a link letting me share this blog on Facebook
Reply to this