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K
kmorley
January 27, 2022
Question

Best way of accounting for purchases made using a credit card?

  • January 27, 2022
  • 1 reply
  • 0 views

Our company uses QuickBooks Desktop Premier Retail 2021.  We purchase products from wholesale distributors for resale to our customers.  We sometimes work with vendors who want payment using a company credit card and I am looking for recommendations about best ways to account for that, including processing the payables check to the credit card company at end of month.

 

All of our vendors and products are already created in QuickBooks.  For a hypothetical use case, consider we purchase product from XYZ Distributors and generate a QuickBooks PO as normal.  We present our Chase Visa credit card info to XYZ Distributors as payment.  We receive the products and voucher the invoice as normal.  At the end of the month, we want to produce a check to pay the Chase Visa credit card account.

 

I understand that I could just set up Chase as a vendor and process these orders as if Chase is the distributor.  But that is a fairly messy solution.  

 

What is the recommended method for ordering and processing using the actual vendor, paying with the company credit card and then printing and remitting a check to Chase at end of month?

 

1 reply

Rustler
Rustler
January 27, 2022

****We present our Chase Visa credit card info to XYZ Distributors as payment. We receive the products and voucher the invoice as normal. At the end of the month, we want to produce a check to pay the Chase Visa credit card account.****

 

The Credit card should be an account in the chart of accounts

 

Either
enter a bill with the details, then use pay bills, select the CC and pay the bill and save
or
use an expense transaction, select the CC as the payment source, enter the details and save

 

You pay the bill by making a payment to the CC account, use that CC account as the expense (reason) for the payment

 

CC are not set up as vendors

K
kmorleyAuthor
January 27, 2022

Thank you for that lightning-fast reply!  Please verify that I understand this correctly.  I am processing a real order right now:

 

Ordered product from eBay and generated a PO as normal with eBay as the vendor and terms "Pre-paid with Credit Card".  I paid using Chase Visa card.  Then in Enter Bills & Vendor Credits, I received the products into inventory and processed the invoice as normal (eBay as the vendor still).  Then I used Pay Bills to pay eBay's invoice.  But instead of printing a check as I normally would, I changed Method to "Credit Card" and selected  Account: "Chase Visa" (it was already in Chart of Accounts as "Credit Card").  

 

How do I write the check for Chase Visa?  I can't use either Pay Bills or Write Checks, because Chase Visa is not a vendor and thus can't be selected from the list.  What is the trick?

 

Thanks again!

 

Rustler
Rustler
January 28, 2022

In paybills, using the CC was just you borrowing the money to pay the bill.

 

Just enter a check payable to the CC, and use the CC account as the expense (reason) for the payment.  This is a separate activity

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