Credit card payments accounting (for expenses, not sales)?
20 May 2017, 12:14 AM
When a business pays its expenses using a credit card, is it better to enter each payment using the receipt, or should I post all the expenses for the month categorized by account when I enter the payment to the credit card company? The latter method may be easier, but I'm afraid the date of the expenses will... show more When a business pays its expenses using a credit card, is it better to enter each payment using the receipt, or should I post all the expenses for the month categorized by account when I enter the payment to the credit card company? The latter method may be easier, but I'm afraid the date of the expenses will not match the dates of actual purchases thus expenses for each period will not be reported accurately.

Also, what is the best way to enter credit card transactions using quickbooks? I would be most comfortable to enter each transaction based on the receipt's date, then reconcile the statement from the credit company as of the closing date, then when I pay the balance (assuming paying off every month) debiting the credit card liability and crediting cash account.

I'd appreciate your thoughts, thank you.  
Answer
Votes: 72

Enter the expenses as you incur them. Debit the relevant expense account and credit the credit card liability account. When the bill arrives, reconcile it to the liability account and handle any fees or interest in the same manner -- debit the expense account and credit the credit card liability account. When you pay the credit card bill, debit the credit card liability account and credit cash.
Meta Analysis
A long question with some complicated concepts. No real monetary issues are questioned, but the question tone is natural. The question isn't very well explained, but well formed.
A long answer and insightful. doesn't focus on cash, and the tone is tentative. The answer isn't very clear, and quite hard to understand.
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