Our company does a lot of business with Home Depot. Recently they sent us a gift card to use. I do not know how to record the amount of the gift card into Quickbooks. I can expense things out to the gift card once I know how to enter it. I know the credit side which would be the gift card but what account do I debit?
I'm glad to share with you the steps on how to record a gift card in QuickBooks Desktop (QBDT).
First, you'll need to create an account for the gift card:
Go to the Lists tab and select Chart of Accounts.
From the Account drop-down, select New and choose Other Current Liability under the Account Type.
Enter the Account Name example Gift Card.
Click Save & close when done.
Then, create a service item that should link to the liability account.
Navigate to the Lists tab and click Item List.
From the Item drop down, select New.
Choose Service in the Type field and enter the name of the gift card item.
Under the income account, select the gift card liability account.
Hit Save & close.
Next, create a Non-Inventory type item named advertising expense and link it to the advertising expense account.
Click Save & close.
To issue a gift card, you'll need to create a sales receipt for the customer. In the first line, enter the gift card item and the amount. On the second line, enter the expense item with the same amount but in negative form.
To redeem the gift card create an invoice, in the first line, list the item sold and the amount. In the second line enter the gift card item with the negative amount. The customer will pay the balance due if any.
Also, to ensure that your books are accurate, I suggest consulting your accountant to guide you in choosing the account to be debited.
Additionally, to help you in tracking your customer's transactions in QuickBooks Desktop (QBDT), you may consider reading this helpful article for more info: Manage A/R transactions.
Feel free to post a reply below if you have further questions. I'm always around to help. Stay safe and take care always.
Your answer didn't help me all I wanted to know was what account I credit when I enter the gift card. I went ahead and debited the gift card in a journal entry and I credited miscellaneous income. I didn't know what else to credit. If that is not correct I hope someone will tell me what account I need to credit and I will make the change. Thank you.
You could set up the gift card in Chart of Accounts as a Bank Account (current asset), and then treat it as such. I think the journal entry you did to Miscellaneous Income is fine as a setup.
As you use it, instead of using Enter Bills & Pay Bills, you could Write Checks. Change the bank account from your normal account to the Gift Card, and make up your own check number such as HDGC082120 (Home Depot Gift Card + date). I do this to record automatic monthly EFTs from our bank account, and just use "debit" as my check number. This would credit the gift card balance and bring it down, and debit whatever expense you choose to offset. It would also still link the transaction to the vendor.
If you receive future gift cards, you can always record another journal entry to reload a balance again. Having a specific check number can tell you which gift card it went against in case you need to know for future reference.