Recording Credit Card Charges?

Question

Everymonth we receive a big credit card statement that needs to be recorded in Quickbooks. Since the statement itself serves as the proof of expense, do we need to record each transaction?

Answer 1

Since you use the credit card for business you need to be able to code the purchases to whatever job it was for. If you buy something for one job it should be coded to that job to tally up the cost of goods sold. Make sure you have receipts for each purchase and staple the receipts to the bill along with the check stub after you pay it. You want as much back up as possible in case of audit.

Answer 2

Yes, you need to record each expense. You can do this in Quickbooks by going to the Banking window and to 'Enter Credit Card Charges'. When you enter each line item, you can classify it to the correct account. This way if have a restaurant expense it will go to meals and entertainment and if you buy a computer it will go to office equipment.

When you cut a check to pay for the credit card you code it to the credit card account and this is how the expense hits the books.

Do not enter in bulk. It is incorrect and could lead to an accounting nightmare.

Answer 3

Yes, because you need to determine what account the expenses were incurred in. Maybe 85.00 was office supplies, but then 100.00 was for gas for a vehicle. It all needs separated out. What you do is in QB, when you enter the check number, and who you are writing the check to, it asks you to record the accounts. That is where you break it down into the respective categories. Or, if you choose to enter it as a bill not yet paid, you can still break it down by account. This will help you when it comes to tax time. It will also help when you look at reports so you can see exactly where your money is going.

Answer 4

don't you want to be able to use other functions in QuickBooks to analyze those expenses ? To make sure you didn't pay for something twice? stuff like that ?