Most small business owners must use credit cards for purchases related to their business. This is a good way to track business expenses and the use of funds. Smart business owners often use accounting systems such as QuickBooks to manage the day-to-day financial status of their business. This is important if companies are using credit cards and QuickBooks to keep accurate records, especially for tax purposes.
There are several ways to choose from when dealing with how to record card payments in a QuickBooks file. The credit statement can be rented as an ordinary supplier and paid when the bill arrives. With the write check feature, direct payments can be created. If you pay the full balance every month when the bill arrives, this is the best option.
Another option to allow more detailed recording is to treat credit card bills as liabilities and enter each transaction separately. In this way, you can track the occurrence of each transaction and, when the bill arrives, you can coordinate transactions based on the bill and determine how much you will pay for the balance.
You must have a separate account in the chart of accounts for each card. In QuickBooks, select the type of credit card account to create a new account for each card. If you use more than one card, create an account called "credit card," and then create an account for each card. One advantage of this setup is that QuickBooks can provide all outstanding balances when running the balance sheet report.
For credit card charges, it should be treated as the same as the ATM transaction and entered as it is. These can be manually entered into the QuickBooks file, can also be set up for online banking, and can download transactions. Details on how to download transactions to QuickBooks files will vary based on the bank and the particular credit card company. To enter each charge manually, the Credit Account Fees window can be found under the Banking tab of QuickBooks. No matter which method you choose, you must record fees separately. When the tax time arrives, the company's expenses must be correctly listed separately. Also, if you do not record personal charges correctly, your income statement will be inaccurate.
Supplier bills can also be paid by credit card, which is another feature of QuickBooks. Use the "payment list" window to track payment status, which is especially useful when using an online payment system set up by sellers, or you have provided the seller with a card number to pay the bill. Once the payment is completed, please do not forget to reflect the payment status in QuickBooks so that the balance of the account balance can be kept correct.
As with all accounting transactions organized in the QuickBooks file, proper handling of credit card fees and payments is an important part of the problem of keeping your company's financial status at its best. Taking the time to do it right from the beginning can prevent future figures from counting.
Orignal From: Credit Cards and Quickbooks - Business Owners Need to Understand Information
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