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Best way to connect credit card charges to bills

Forum|Forum|7 years ago
October 16, 2018
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I have a vendor who charges my credit card when I place an order for the total amount. Say I see a charge show up on my card for $1360. Then they partially ship over extended an period and each time this is accompanied with a bill for those items shipped.

I could just enter the one charge for that vendor and be done with it but I need to split the amount between cost of goods and shipping expense and don't know those amounts until weeks later the bills start coming in with the goods. I also need to keep track so I know all I paid for is received.

If I enter the charged amount as a straight credit card charge. Can I later assign or pay several bills to/with that charge as they come in?

I can wait for the first bill, enter say a $550 bill, apply the $1360 payment to it and leave the rest as a credit to apply to consequent bills but this means I have to wait for the first bill before I can enter the charge which could be a month after the charge happens.

Thanks

QuickBooks Online

Best answer by Rustler

I need to split the amount between cost of goods and shipping expense

If you are buying inventory items and have QBO plus, inbound shipping, taxes, duties are all part of item cost - per the IRS, and are not posted separately.

If I enter the charged amount as a straight credit card charge. Can I later assign or pay several bills to/with that charge as they come in?

Yes, if when you enter the CC charge you select accounts payable - that sets a credit with the vendor in QB, and when you enter a bill, you can apply all or part of the credit in pay bills to pay it.

Entering a CC charge is borrowing money. When you pay it to the vendor that is a deposit basically, since you get nothing in return at the time of payment. When the bill comes in, that is when you spend the borrowed money out of the deposit. So actual expense (or asset purchase) occurs in the period it was used

RustlerAnswer

I need to split the amount between cost of goods and shipping expense

If you are buying inventory items and have QBO plus, inbound shipping, taxes, duties are all part of item cost - per the IRS, and are not posted separately.

If I enter the charged amount as a straight credit card charge. Can I later assign or pay several bills to/with that charge as they come in?

Yes, if when you enter the CC charge you select accounts payable - that sets a credit with the vendor in QB, and when you enter a bill, you can apply all or part of the credit in pay bills to pay it.

Entering a CC charge is borrowing money. When you pay it to the vendor that is a deposit basically, since you get nothing in return at the time of payment. When the bill comes in, that is when you spend the borrowed money out of the deposit. So actual expense (or asset purchase) occurs in the period it was used

P

Patd265Author

Thank you. That cleared that up.

K

KatieLou76

HI Aleksandra,

Thank you for your query & Welcome to the QuickBooks Community!

Before I can advise would you be able to clarify which QuickBooks product you have is it Self Employed or small business and a UK product?

We are currently out of the office until tomorrow morning so if you reply it will be picked up first thing in the morning by myself and I will be able to assist you with your query.

Thank you in advance and I look forward to hearing from you.

Hope you enjoy the rest of your evening!

Kindest regards

Kristine Mae

There's not much of a difference if you're using the Enterprise version, Vnguy027. I'll help you link the credit to the bill.

When you go to the Pay Bills window, you'll have to select the bill first so the credit will show, then click Set Credits.

After selecting the credit, click Pay Selected Bills.

I'll add the reference on how to record a vendor refund or credit for more information.

If you have more questions, please drop a comment below. We're just a post away.

L

Learner2020

Thank you for the help. Alas, I'm still stuck.

When I'm in the credit card purchase/charge screen, I try to change the account from the COG account to "Accounts Payable". When I try to save, I get the error "Please choose a vendor when using an Accounts Payable account as a line item."

So when I go to pay the bill, this doesn't show up as a credit or anything. HALP.

MariaSoledadG

Thanks for the screenshot. There are a few things that you can do to fix the issue, Learner2020.

The message appears when you choose Accounts Payable (A/P) on the transaction but the name associated isn't a customer or vendor name. You'll want to check the type of name used on the transaction. Then, review the type of name listed.

Go to the Customer, Vendor, or Employee Center, to find the desired name. If the name is listed under the wrong type, you can correct it and create a new name.

Also, Accounts Payable is the money that a business owes. This is used to track the money you owe to your vendors. The first time you enter a bill, QuickBooks will add Accounts Payable to your Chart of Accounts. Then, when you enter or pay a bill, QuickBooks records the transaction to your Accounts Payable account.

In Accountings view, A/P can serve as either a credit or a debit. Because accounts payable is a liability account, it should have a credit balance. The credit balance indicates the amount that a company owes to its vendors. However, I still suggest reaching out to your accountant if you have questions about Accounts Payable.

For future reference, please review this workflow is in QuickBooks: Accounts Payable Workflows in QuickBooks Desktop.

Please touch base with us if you need anything else. I'm always here to help.

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