Accounting for Company Credit Cards in QuickBooks

Accounting for Company Credit Cards in QuickBooks


When we are called to assist new clients with a particular QB problem, we often find several other problems exist.  Some are more common than others.  For example, we often find that clients do not set up separate accounts for their credit cards.  They simply put the credit card in as an account payable.  If they do not pay the credit card in full each month it is often difficult to determine if they have captured all the credit card activity such as late fees and interest and return credits.  If they set up each credit card as its own liability account, they can record credit card charges as they occur during the month.  They can also reconcile the account on a monthly basis just as they do (or should be doing) with all bank accounts.

 Reconciliations provide assurance that you have captured all the activity that occurred.  Another advantage to keeping separate accounts and recording the activity separately is capturing the information in the correct month.  Often credit cards run from the middle of one month to the middle of the next month resulting in a statement that shows two different month’s activity.  If each charge is entered as of the date it occurred then proper monthly cutoffs will be reflected in your financial statements.

 An important advantage that cannot be overlooked is spotting bogus or fraudulent charges.  By reconciling your card each month, you are forced to look at and check off each charge on your books against the credit card.  Any charges that appear on your credit card statement and not on your books could be possible fraudulent charges.

 Keeping separate credit card accounts is simple, advantageous and provides a system in which errors can be spotted and corrected in a more timely fashion.


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