Recording Credit Card Charges

	Method One
	Method Two

This method of recording credit card charges includes entering an a/p invoice made payable to the credit card company for the amount of the current charges on credit card statement. In this fashion, the liability of the credit card charges are reclassified to accounts payable and the invoice will show up on the aging schedule as any other invoice. If your CPA would prefer to have the credit card liability remain in the separate liability account, then please refer to Method Two.

** Note: The debit/credit notations are to describe how AccuBuild will post the entries in the general ledger.

3.	Create generic vendors for small daily charges such as: Fuel, Dining, Interest Expense. This will prevent the need of creating each individual restaurant name, or gas station name, etc.

Enter a handwritten a/p check entry to record the credit card charge. Change the checking account at the top of the screen to the credit card liability account. The check date needs to be the same date as the receipt date. Choose the proper expense account at the bottom of the screen. Save the entry and post the check. (Debit=Expense; Credit=Credit Card Liability Account)

If you have a supplier or subcontractor invoice that you have already entered into a/p, and then decided to pay the invoice with the credit card, enter the h/w check using the credit card liability account as the checking account. Since the invoice is already in the system, the 'payables link' option will be checked and you will choose the appropriate invoice from the InvRefNo field. Save your entry and post the check. (Debit=A/P; Credit=Credit Card Liability Account).

Note: Paying a subcontractor or a supplier with a credit card is often posted into AB at the time of the charge rather than waiting for the credit card statement to be received. To prevent the duplication of credit card charges, review the credit card activity by using the Ledger > Check Register option and selecting the credit card liability account.

3.	Handle credit card returns in the same fashion as any other miscellaneous charge except the dollar amount will be negative. (Debit=Credit Card Liability Account; Credit=Expense)

4.	You may also enter interest expense charges with a handwritten check in the same fashion as any other charge. Use the vendor name 'Interest Expense'. The invoice date will be the statement closing date. (Debit=Interest Expense; Credit=Credit Card Liability Account)

Go to Reports > Ledger > G/L Detail Report – Account Order. Select the date range of your credit card statement (ie. 06/15/2012 – 07/14/2012). Select 'partial run' and choose just the credit card liability account otherwise your report will include activity in all accounts. Use this report to validate the charges on your actual credit card statement.

2.	Once you have reconciled the account, you can then enter the credit card statement into accounts payable.

Enter the credit card statement into a/p invoices just like any other invoice. The 'contra account' will always be a/p. The invoice date will be the date of the statement. Assuming you have reconciled all the statement charges to the g/l detail report, then you can enter a lump sum for the invoice amount (total new charges minus returns plus interest). Enter the credit card liability account as the expense account at the bottom of the screen. (Debit=CC Liability Acct, Credit=A/P).

The activity in the credit card liability account should show all the daily activity and then the lump sum statement amount. The total of the account for the statement date range should equal zero. The total liability has now been moved to accounts payable, and the invoice to the credit card company is now awaiting payment.

This method of recording credit card charges is identical to Method One with the exception that the credit card statement is not entered into a/p and will not show up on the aging schedule, therefore, all payments to the credit card company must be entered as a handwritten check. In addition, the bank reconciliation program can be used to reconcile your credit card statement just like any other checking account.

** Note: The debit/credit notations are to describe how AccuBuild will post the entries in the general ledger.

3.	Create generic vendors for small daily charges such as: Fuel, Dining, Interest Expense. This will prevent the need of creating each individual restaurant name, or gas station name, etc.

3.	Handle credit card returns in the same fashion as any other miscellaneous charge except the dollar amount will be negative. (Debit=Credit Card Liability Account; Credit=Expense)

4.	You may also enter interest expense charges with a handwritten check in the same fashion as any other charge. Use the vendor name 'Interest Expense'. The invoice date will be the statement closing date. (Debit=Interest Expense; Credit=Credit Card Liability Account)

1.	The credit card statement itself is not entered into accounts payable with this method. Therefore, the invoice will not appear on the a/p aging schedule nor as an invoice for payment through Schedule Payments.

All payments made to the credit card company must be entered through Payables > Handwritten Checks. Again, there will be no open invoice to attach to the payment. The credit card liability should be used as the expense account on the entry. The check may be printed from this screen or simply posted if payment was made online.

Use the Bank Reconciliation program within the Ledger module to reconcile the account. As with any other checking account, the reconciliation date will be the end of the month rather than the actual date of the statement if the statement date is mid-month. Enter the statement's ending balance in the Balance field.

2.	Clear each item that appears on the credit card statement. All other items will be noted as outstanding.

Hint: Sometimes there will be items that are charged on the closing date of the statement that may not appear until the next statement period but, in general, only those items dated after the statement ending date will be outstanding. If you find there are older charges that are still outstanding, do a little research to make sure that the charges were entered correctly into AccuBuild. Perhaps the wrong credit card liability account was used to record the charge.