Credit Card Query

This is working as it should be, @Lusk.

In QuickBooks, credit card transactions should always be posted as positive values. This is because liabilities or payables are always positive. In case you see a negative value for a credit card transaction, this means that your bank is the one that owes you money since your liability is negative. 

Additionally, ensure to reconcile your accounts to keep them current and up-to-date.

Let us know if you have further concerns with your QuickBooks balance. We'll be here to help you in any way we can.

Thanks for the quick reply.

So I have been entering supplier invoices, paid by card, as a bill and then paying them off immediately in Autoentry.

A bill would be posted as a credit to the creditors control account and then a debit to the relevant expense account.

When that bill is then paid, we need to reduce the value in the creditors control account by debiting that account and to then reduce the amount in the bank balance, we are in effect paying money out of the account which would be a credit.

So what happens when I make a payment in the credit card account and why does this appear to be different in the main bank account?

I'll explain to you why payment via credit card is different when using a bank account, Lusk.

Debit cards are linked to a bank account and draw directly from those funds. On the other hand, credit cards don't draw any funds immediately and must be paid back in the future, subject to interest charges accrued. That's the reason why when making a payment using a credit card is different from a debit card or main bank account. 

However, QuickBooks Online (QBO) lets you record credit card payments to keep track of your expenses and maintain accurate financial reports. You can follow these steps instead:

1. Click + New.
2. Under Money Out (if you’re in Business view), or Other (if you’re in Accountant view), select Pay down credit card.
3. Select the credit card you made the payment to.
4. Enter the payment amount and the date of the payment.
5. Choose the bank account you paid the credit card with.
6. If you made a payment with a check, select I made a payment with a check. In the Check no. field, enter the check number, or if you paid electronically, enter the EFT number.
7. If you want to add notes or file attachments, select Memo and Attachments and follow the instructions on the screen.
8. Click Save and Close.

For more information about the process and how you can record the payment using a check, check out this article for more information: Record Your Payments To Credit Cards in QuickBooks Online.

Moreover, after you've made the payment, QuickBooks downloads transactions regularly. Learn how you can categorize transactions once you connect your bank. I've added this article for more details: Categorise Online Bank Transactions in QuickBooks Online.

Please get back to us if you need further assistance when making a payment. We're always right here to help you all the time.

Many thanks for the reply.

Are you saying that if we pay out of a credit card, the bill option should not be used and we should only use the expense option?

Could you give me the T Card example please?

Hi Lusk, thanks for getting back in touch with us here 

You can use an expense or bill when recording purchases with a credit card. The only difference is that a bill is generally used for payables (where the payment is to be recorded later) while an expense is used for items paid for on the spot. 

After entering the transaction, you can view the transaction journal (by selecting More on the toolbar of the transaction > transaction journal) which shows the specific accounts that it posts to and the debit/credit values. 

If you're still unsure, I'd recommend contacting our support team by webchat or by calling 0808 234 5337 (M - F, 8 AM - 7 PM, free from UK mobile & landlines). The agents available here will have access to set up a remote screen share with your QuickBooks to look at this with you. Thanks again!

The original double entry to record the bill was as follows:

Creditors control CR28.20

Vehicles DR 23.50

VAT DR 4.70

So this is all good.

When it came to paying the bill from the credit card account, the following double entries were found

Credit card CR 28.20

Creditors DR 28.20

So this too is all good and working as expected.

I would assume as I have not tested this as yet, but if an expense were to be put through the same transactions would happen but it would not hid the Creditors control account.

Where it seems to be different to other accounting systems is that when bills / expenses are paid through the credit card, the balance increases as more is paid; other accounting systems (Sage) work in reverse. When a bank transfer is made from the main bank account to the credit card account, the balance goes the other way to the expected way.

I appreciate your prompt reply, @Lusk. I'm here to clarify a few things about how credit card balances are affected each time you record bill payments in QuickBooks Online (QBO).

A Credit Card (CC) gives you an option to borrow funds for purchases or for paying bills, though please note that it is a liability account and not an asset account. For example, when paying a bill or expenses using a bank account, then your bank balance would be reduced. But, if you're paying it with a CC, then it will increase your CC card balance.

You're also correct that when you record a bank transfer from your main bank account to the CC account (to pay off the CC balance), it will reduce the CC balance as it should. You may check out this article to learn more about how it affects double-entry bookkeeping: How accounts are affected by debits and credits.

Nonetheless, I highly recommend reaching out to your accountant if you need additional guidance or questions regarding recording these entries. They can also guide with technical and accounting perspectives within the program.

Additionally, you may check out these references as your guide to view various procedures to reconcile your online transactions seamlessly:

• Reconcile an account in QuickBooks Online
• Learn the reconcile workflow in QuickBooks

Please know that you can always get back to this thread if you need further assistance with recording credit card transactions. I'll be around to provide the information you need.