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hp 60
July 25, 2022
Question

credit cards

  • July 25, 2022
  • 1 reply
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Hi,

I am new to Quick books and I am trying to reconcile for tax purposes. There are three business Credit Cards and none of them have ever been reconciled.  I don't know if I am supposed to just record them as credit card transactions and reconcile or if they are supposed to be categorized as an asset??  Also, the payments on the credit cards are made via transfer from other accounts.  How does all this affect the balances on the different accounts?  I'm sorry for not knowing exactly how to word or ask these questions but I hope it makes sense to someone who could answer for me.  Thank you in advance :)

1 reply

P
Pete_Mc
July 26, 2022

Each credit card transaction should be Categorized for the correct type of Expense.  The issue will come up for your Accountant if you purchased Office Equipment or some other large item that is not handled the same as a basic expense like paper for the printer. 

 

If you're just new to QBs, but the QBs you're using was set up by someone else, then there's a good chance all of the Chart of Accounts already exist.  So you should find Accounts like Office Expense.  Some of those may or may not have Sub Categories (like I have General Expenses, Software and some others just to keep track).  So take a look in the list before you pick the first Acct you see.

 

I would go through the Credit Card Register first and just go through the Transactions.  There is going to be some Category Acct associated with the Transaction as QBs would not enter it without one.  But if the entries were just made with QBs suggestion/guess, it could be a anything.  Pending how many charges, it may not be a quick task.

 

Most of the entries should be pretty straight forward.  If you own the building where you work it might get a little questionable for your accountant.   A trip to Home Depot to by some screws would probably just be an expense and they *probably* would just toss it in Office Expense.  But buying Paint might fall under Repairs & Improvements, which you'd want to ask them.   One trick is to put something like "?????? Accountant - bought paint" in the Memo field.  This will show up on a Quick Report and you can let the Accountant know to look at it and Re-Categorize the Expense if necessary.

 

When it gets to the actual Reconciling, it should be pretty straight forward.  Start with the oldest Statement and move forward.  If you do not Reconcile for some reason, don't move on until you find the issue.  If the Transaction was manual entered, often there are just transposed numbers.  (e.g. 19.81 vs 19.18)  And if Bank Feed was used, watch out for duplicate entries.  One big gotcha there is if the CC was used to pay an Invoice.  Be sure to delete the duplicate entry that is NOT associated with the Invoice.  The Transaction may show "Cleared" and have more info in the Memo field, etc.  But that doesn't mean it's the one QBs is using and you can always move that info over to the other entry.

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