Last week we examined the credit card process in QuickBooks. Those steps which we discussed are the surest way to have QuickBooks help track credit card balances and purchases.
So this week, let’s consider another approach for those, a way to shortcut the process where necessary.
Some users object to the credit card feature in QuickBooks as it requires the entry of each credit card receipt. In a company with several credit cards for employees, and many charges on those cards, this task can become quite tedious.
In an attempt to find a shortcut, the credit card activity may be entered as one large transaction from the credit card statement. Sometimes, only one expense account is used, a special account being created and named “American Express”, or some such title.
There is little that can be done other than to go back and edit these individual checks and break out the expense lines in the stub portion of the check to match the actual expenses.
At times, users will create a Bill in QuickBooks to reflect all charges from the credit card statement. Often, this is done so that only a portion of the amount can be paid, leaving the remaining balance in AP to be paid at a later date. This recipe for disaster almost always fails. The remaining balance in AP will rarely match the balance shown on the credit card statement.
If someone must use a summary method to record credit card charges, it is still best to use the credit card feature. Just as many account lines can be used on an Accounts Payable bill, so, also, can many lines of accounts be used on a credit card charge.
Using this method allows the credit card feature to be used, the balance to be tracked more accurately, and the ability to enter the charges in summary fashion as the QuickBooks user wishes.
A disadvantage is the lateness of the reporting. As an example, if credit cards are used by a contractor to purchase job materials, those expenses may not be in the accounting system for 30 days or so, as the data input waits for the credit card statement to arrive. Anyone examining job reports printed from QuickBooks being used in this way, may not have meaningful numbers.