Your GL will have liability accounts (2XXXX) set up to track the liability accruing on any company credit cards you and the staff use.
With these set up as Detail Credit Card Accounts, you can then reconcile the debits and credits to the card when you receive a statement – just as you would a normal cheque-style account. Each time you pay a vendor using the company credit card, it effectively acts like a cheque.
 |
One thing to be aware of is that many cards are debit cards (not credit cards), meaning transactions are immediate, and reduce the running balance on one of your asset accounts – transactions normally appear on your normal bank account statement. |
Because it is a credit card, you are accumulating liability. Your GL will show the running total of what has been charged to the card. When you transfer funds from another account to clear the monthly balance on the card, the liability will reduce. Because the GL shows the running total, you can easily track the available funds on the credit card.
To transfer money from a bank account to a credit card, there are two methods you can choose from:
1.Via the Cheque Book:
Select Type as Cheque. Select the credit card GL account. Enter the amount, then in the Acc.Code field choose the bank account.
2.Via Deposit:
Select Type as Deposit, choose the bank GL account. Enter the amount, then in the Acc.Code field, choose the credit card account.
Reconciling a credit card account is as easy as reconciling a normal cheque account. On the ribbon, go to Accounts > Bank Reconciliation and use the drop down on the Accounts field to select which card is to be reconciled. Match transactions to the vendor payments you have made and add the bank charges, etc. Don't forget that you will need to write a cheque/direct deposit to the credit card account to clear the balance – use exactly the amount the Credit Card Centre has used.
If you choose to pay a vendor using the credit card, and the transaction does not appear on the statement (ie. it is still in your reconciliation list), you will need to check with the vendor as to what date they actually ran the transaction (in case it missed the cut off on the statement period), or if they have run the transaction at all. If they haven’t charged your card, and for some reason want an alternate payment type, you will need to reverse the payment you have recorded in Jim2.
|
To reverse a payment it cannot be reconciled. |
The upshot of all the above is: you record a payment to the vendor when you think it happened, rather than leave vendor payments till the statement comes in. Although it is neither here nor there as to where the liability lies (in your creditors balance or credit card balance) in dollar terms, it’s nice to keep regular track on what funds are available to you on your credit card.
Further information: