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spencervet13
October 10, 2021
Question

If two credit cards are reported under the same bank feed, how do you reconcile when payments are only applied to one card number?

  • October 10, 2021
  • 3 replies
  • 0 views
our business cc has a primary card number and an additional number issued to an employee. purchases are applied to the respective card numbers and appear as such when downloaded from bank feeds. payments sent to cc issuer are directed to the primary account number. our QBO chart of accounts was set up with 3 accounts - a parent account and 2 sub-accounts that correspond to the respective credit cards. Is this the correct set up? We were instructed to apply payments to the parent account but, when we reconcile, the sub-account balances do not change to reflect what is happening in real life. Our accountant states that additional entries are required to effect the sub-account balances? It feels like there should be an easier, more direct method?

    3 replies

    MichelleBh
    MichelleBh
    October 10, 2021

    You've come to the right place for answers, @spencervet13.

     

    Thank you for providing complete details of your concern. I'll provide some explanation of how parent and sub-account work in QuickBooks Online. This way, I can guide you accordingly in handling your business. 

     

    To begin with, you'll need to add a specific sub-account for your payments to personalize the transactions. Your Chart of Account (COA) looks like this in the screenshot below: 

     

     

    Recording transactions in sub-accounts will affect the parent balance. But entry in the parent will not affect the sub-accounts. Let me give you an example. 

     

    You record money out under the parent account, the balance will go down, while the sub-account fund will remain the same. 

     

    When it’s time to reconcile, you only need to reconcile the parent account because all the transactions in the sub-accounts roll up into it. That said, there is nothing else to do with your sub-account balance. For more knowledge about the process, check out this article: About bank or credit card sub-account setup. 

     

    In addition, if you have issues when reconciling accounts, you can use this link to resolve the issue: Reconciliation hub.

     

    Furthermore, check out these articles below on how to personalize COA and to know the usage limits: 

     

     

    Feel free to mention my name in the comment section if you have clarification on this matter or other concerns. I'm always here to help you. Have a great day, @spencervet13.

    S
    spencervet13Author
    October 10, 2021

    @MichelleBh , you say that there is nothing else to do with the subaccount balances? So, they just continue to grow? That doesn't make sense. When we look at our accounts, we want them to mirror what is happening in real life. All of other bank accounts can be brought to match exactly what shows in the bank on any given day once the bank feeds are cleared. This does not happen with our credit cards - ever. The 'bank' balance for the primary card reflects the total balance (the yet to be paid balance from the previous statement plus the purchases as they accumulate throughout the billing cycle for both cards) and the 'bank' balance for the second card shows as '$0.00' (always). However, the QBO balance for these accounts continue to grow in opposite directions. That is to say the primary card shows as a negative balance while the secondary card shows as positive balance. The primary card balance is ever decreasing by the difference of payments made toward the total credit account balance against purchases made specifically on that card. Meanwhile, the secondary card balance grows in 1:1 fashion with purchases made specifically on that card. It is not a 'clean' process. Unless, we take additional steps through journal entries or, honestly I do not know how our accountant 'fixes' the balances, it is very disconcerting to see the balance of the secondary card growing into the hundreds of thousands of dollars. If I have to take the extra measures to clean up those subaccount balances to mirror real life EVERY time I run the bank feeds, I will do it but, it really seems like this could/should be automated when payments are applied to the parent account. Also, in order for me to make those entries to 'fix' the balances, I would need to understand and know how to do them so as not to create false profits/expenses and throw off all of the accounting. 

     

    Is this something that can be done by entering the purchases differently? By creating a bill against the parent account instead of just letting the balance roll from month to month? By deleting the parent account and making the primary card (according to the card issuer) the parent account? Can it be set up so the individual card bank feeds are directed into a single COA account instead of separate ones?

      C
      ChristieAnn 11
      October 10, 2021

      Hi there, spencervet13.

       

      I appreciate you for coming back to the thread and add some clarifications. This isn't the kind of impression that I'd like you to have and we know how much time it can take when something isn’t working the way you need it. That said, I'll be sharing further information on how transactions in different accounts work in QuickBooks.

       

      As mentioned above, when the time comes that you need to reconcile, you only need to do it on the parent account since transactions from the subaccounts roll up into it. That said, there is nothing else to do directly with your sub-account balances. However, you can manually clear the balance. This isn't needed to create a journal entry. If you pay the card with one check, make sure to enter the sub-accounts in the payment instead. This will zero out their balances including the parent.

       

      On the other hand, it will depend on how your bank sends the downloaded transactions. If the transactions download to one account, connect only the parent account. If the transactions download to the individual accounts, connect the subaccounts and not the parent account. That said, you can click this article to view additional details on how to handle multiple banks and sub-accounts in QuickBooks: About bank or credit card subaccount setup.

       

      Please refer to this article to see different guidelines on how you can fix various reconciliation issues: Learn the reconcile workflow in QuickBooks.

       

      Don't hesitate to post again or comment below if you have any questions about reconciling or how to handle parent/sub-accounts in QuickBooks Online. I'm always here to help.

      B
      barb_r
      August 15, 2022

      I have no problem with reconciling, it is the subaccount balances showing on the Balance Sheet. How can I remove the subaccounts from showing on the Financial Reports on OBO?

        J
        joefake1
        February 9, 2025

        It does not seem like this ever got resolved on this thread and I have the same problem.

         

        I have 2 'parent' credit card accounts on QBO that are linked to my bank.  For some reason, it only pays the main credit card on the account setup with the bank.  So I show a negative amount on 1 credit card of over $1,000, but the same amount on the positive side on the other credit card.  Together it's a wash, but I would prefer it to be zereod out on one card and accurate on the other.

         

        This chain never solved the problem - it sounds like this is something QBO just can't handle?

        M
        Mark_AG
        February 9, 2025

        Hi there, Joe.

         

        You deserve a better experience than this, Joe. I'm here to turn things around and show you the best way to post your transactions accurately.

         

        The best approach for reconciling your two credit cards is to set them up as separate accounts in QuickBooks Online. By setting up each credit card as its account, it will accurately track transactions for each card individually. This will prevent confusion and ensure that payments are applied to the correct cards.

         

        Here's what you need to do next. Reach out to your bank to see if there are any options available to direct payments to specific cards when using their online banking services to QBO. This can help ensure that payments are applied correctly from the source.

         

        For now, we can exclude the specific transactions from your credit cards in the bank feed. Then, manually record the payment for each card. Here's how:

         

        1. On the left menu, head to Transactions and choose Bank Transactions.
        2. Choose your credit card account.
        3. Find and select the transaction you'll need to exclude under the For Review or Categorized tab.
        4. Click Exclude.

         

        After recording the transactions manually, mark them as cleared in the Chart of Accounts. Here's how:

         

        1. Go to the Gear icon and select Chart of Accounts.
        2. Search for your credit card account with the recently made transaction and click the View Register button.
        3. Click on the blank column in the ✔ column of the transaction until it shows C or cleared.

        Moreover, you can also check out this article to help you in the future: Fix issues for accounts you've reconciled in the past in QuickBooks Online.

         

        Let me know if you have other concerns besides clearing your credit card transactions in QBO. I can certainly help you with anything.

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