QuickBooks’ process for credit card charges is often overlooked by users. It appears to be extra steps, making the keeping of books more time-consuming.
But contrast that with the additional time required when shortcuts go wrong, as they often do, and with the time delay of expense transactions being reported thirty days after the fact. The comparison makes the credit card process more attractive.
First, let’s examine the process the way it was designed, then we’ll look at a shortcut that works with the process, not circumventing it.
The first requirement to using the credit card feature in QuickBooks is to have a credit card type of account. Once you create your fist credit card account on the chart of accounts, QuickBooks functions used in the process become available.
Begin tracking credit card balances by entering credit card charges.
Entering a credit card charge is not difficult. It is little different from entering a bill or a check even.
Enter all the charges as the month continues, once the monthly statement from the credit card company arrives, it’s time to reconcile. The process is the same as reconciling a bank account. Click on the Reconcile icon or choose it from the Banking drop-down menu. Then specify the account to be reconciled as the credit card account.
After checking off the items listed on the credit card statement and the Difference field in the lower right part of the screen reads zero, click Reconcile Now. The program will pause, then display the following:
QuickBooks will allow you to create the payment for the credit at this point creating either a check or a bill to be paid later.
If you click cancel and no payment is created at this time, a payment can be made on the credit card at any time. If you create a regular check to do so, just use the credit card account where the expense account goes on the stub portion of the check.
The payment will show up in the reconciliation window to be matched with the next credit card statement.
Next time, some ideas for shortcuts that will keep the credit card process viable in QuickBooks.