I've given gifts cards to friends. How do I enter these in Intuit as liability for my company? Thanks

Hello, info. 

Thank you for your inquiry. I'm here to share some details on how to record gift cards inside QuickBooks. You'll have to create a liability account named gift cards and create a service item connected to the liability account.  

Once done setting up Liability and Service items, you can create a sales receipt for the gift card you will give to your friends. 

Here's how to create a Liability account: 

1. Go to Chart of Accounts, then click New.
2. In the Account Type drop-down, select Other Current Liabilities.
3. In the Tax form section, choose Trust Accounts - Liabilities.
4. Enter GC Issued in the Name field.
5. Click Save and Close.

Now, create a service item associated with the liability account. Let me show you how:

1. Click the Gear icon, then select Products and Services.
2. Select New and choose Service.
3. Enter the Gift Card in the Name field.
4. In the Income account drop-down, select GC Issued.
5. Click Save and close.

After that, you can create a sales receipt for the gift card you'll be giving to your friends.

1. Click the + New icon, then choose Sales Receipt.
2. Tap the customer's name.
3. Select Gift Card from the Product/Service drop-down.
4. Enter the amount.
5. In the Deposit to section, choose Choose the specific Expense account.
6. Hit Save and close.

Also, I suggest reaching out to your accountant. They can be a great help on this topic, too. They know the best way to enter the transactions and ensure they suit your accounting preference.

You can also check this article about selling and redeeming gift cards or certificates in QuickBooks Online. This article provides more information on recording and tracking the transaction using gift cards. 

Feel free to leave a comment below if you have any other questions. Have a great day! 

Thanks AileneA

When I press New in Chart of Accounts, I see something different from what you described. I don't see Other Current Liabilities in Account Type. I only see Current Liabilities. So I choose Current Liabilities instead. Under it, there is Detail Type and from there I chose Other current liabilities. Then I gave it a name of Gift Card Liability. I didn't see Tax from section dropdown. (Not sure why Trust Accounts - Liabilities should be chosen as my corporate structure is not a trust.)

Also, I don't think I should create a sales receipt because the gift cards were not sold. They were given as gifts so there was no corresponding revenue/income. I'm thinking of using Gift Card and Donations instead so it can be reflected as an expense rather than income. 

Hello there. Thanks for getting back in on this thread. Let me share additional insights to help you record gift cards in QuickBooks Online.

As my colleague has shared above, its preferences or steps are for the United States region. However, the recording processes given are correct. Beforehand, I appreciate you sharing a screenshot, and yes, you're on the right track. You'll need to set up a liability account and a service item. You can record the Gift Card as sales receipts when issued and invoice when redeemed. To do that:

1. Go to Settings and select Chart of Accounts. Then, click New.
2. From the Account Type dropdown, choose an appropriate liability account. 
3. In the Detailed Type dropdown, select the detail type that best fits the transaction you want to track.
4. Ensure all necessary details are entered correctly.
5. Click Save and Close.

Then, you can follow the steps above when creating a service item that must be associated with the liability account created. Once done, you'll need to create a sales receipt for the customer.

Also, once the gift card has been redeemed, you can record them as an invoice. To guide you how, please refer to the steps below:

1. Click the + New icon, then select Invoice.
2. Choose the customer's name.
3. On the first line, choose the Item being bought.
4. Enter the amount.
5. On the next line, click on the Gift Card (the one linking to a liability account), and enter a negative amount.
6. Click Save and Close.

Here's an additional reference you'll want to visit: Sell and redeem gift cards or certificates in QuickBooks Online.

Additionally, I'd suggest consulting your accounting professional to guide you in what accounts to use and further assist you with the accounting process to ensure your books are accurate.

I've added this guide to help you review and ensure your bank and credit card statements match: Reconcile an account in QuickBooks Online.

We'll always be around whenever you need additional assistance recording gift cards. Feel free to leave them in the comments below. Keep safe and have a good one!

Hi FateCandyLaneT

I understand creating the service item as sales receipt if I had sold the gift cards and received payment on them. However in this case, I had gifted them to friends so I don't think the service item should be a sales receipt. Instead, it should be an expense item so it shows in my P&L as an expense rather than revenue.

Thanks

Hi there, info-magieshoes-.

Allow me to elaborate by sharing additional information about tracking gift cards in QuickBooks Online.

If you need to record gift cards you gave to your friends as an expense, you can set up a cash account to track the balance of your gift certificates.

Here's how:

1. Click on + New.
2. Choose Expense.
3. If you purchased the gift cards from a specific vendor, you can choose that vendor from the Payee ▼ dropdown. Otherwise, if you're the one who produced the gift cards, leave it blank.
4. From the Bank account or Payment account ▼ dropdown, select the account used for the gift certificate (checking, credit card, petty cash, etc.).
5. In the Category details section, select the Category ▼ dropdown to select the gift certificate account. If you don’t have an account for the the vendor's gift card, here's how to add one:
   1. Select Add New.
   2. Set the Account Type to Bank and detail type to Cash on hand.
   3. Give the account a name specific to the vendor and its status as a gift certificate account. Example: Joe's Hardware - Gift Card.
   4. Ignore the ▼ dropdown field that says When do you want to start tracking your finances from this account in QuickBooks?
   5. Hit Save and Close.
6. Enter the amount of the gift certificate.
7. In the Memo section, write down where you gave the gift card.
8. Select Save.

On the other hand, if you need to track the number of gift cards as an inventory item, use the steps outlined in this article: Write off inventory items given as promotional samples. It provides steps on how you can create an expense account for the gift card and how to create an invoice to reduce the item count in your inventory.

Return to this thread if you still need assistance or have other concerns gift cards/certificates. I'll be here to check on your response.