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Level 1

How do you record interest charges for credit cards?

I just started using QB and have not signed up for Online Banking until I become more familiar with the product.  I need to know how I can enter credit card interest charges so I can reconcile my credit card.

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Best answer 12-10-2018

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Level 8

How do you record interest charges for credit cards?

Enter credit card charges, assign your expense account. Or use the service charge field when you reconcile the account.

View solution in original post

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Highlighted
Level 8

How do you record interest charges for credit cards?

Enter credit card charges, assign your expense account. Or use the service charge field when you reconcile the account.

View solution in original post

Highlighted
Level 1

How do you record interest charges for credit cards?

Where is the service charge field?  The only fields I have are Beginning Balance, Ending Balance and Ending Date.

 

*Edit:  Sorry, my question is about QBO.  I just saw this was desktop.

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Moderator

How do you record interest charges for credit cards?

That's not a problem, @jesserain.

 

I can help you locate the service charge field when reconciling in QuickBooks Online (QBO).

 

When you reconcile an account in QBO, you can locate the service charge field at the bottom of the Reconciliation Window.

 

Here's how:

 

1. Click the Gear icon at the top, then pick Reconcile under Tools column.
2. On the Reconcile an account window, you'll see the Service Charge field under Enter the service charge or interest earned, if necessary.

 

You may also refer to the sample screenshot below.

 

 

That's it! I hope that this response finds you with a smile. Please don't hesitate to post again or leave a comment below if you have any follow-up questions. I'm always here to help. Have a great rest of the day.

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Level 1

How do you record interest charges for credit cards?

Hi @FritzF, I was wondering if you could help me.  I have QBO and I don't seem to have the same type of window that you have when reconciling my credit card account (your picture below).

 

 

 photo 1.jpg

Below is what my window looks like when I hit "reconcile."  How do I get to your type of reconciliation window?

 

 

 photo 2019-01-13_9-35-15.jpg
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QuickBooks Team

How do you record interest charges for credit cards?

Hello there, Rai1.

 

For accounts connected to online banking, the Service Charge, Interest Earned, and Finance Charge (credit cards) fields do not appear. This is because these entries are downloaded automatically from your bank. 

 

If the account that you're reconciling is connected to your bank, then proceed with reconciling it.

 

Please let me know if you have more questions.

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Level 1

How do you record interest charges for credit cards?

"continue reconciling" doesnt help with the interest charge. my reconciliation will be off. how do we add interest when theres not fields to enter it? we cant enter it as an expense as it doesnt show on hte line items

Highlighted
Moderator

How do you record interest charges for credit cards?

Glad to have you back, @Troni!

 

You can post your interest charge to your interest expense account. Let me help you enter it to your QuickBooks Online.

 

First, you can enter it as an Expense transaction but not under the Item details. Instead, you'll post it to your Interest Expense account. 

 

Let me show you how:

  1. Go to the Plus icon.
  2. Under Vendors, select Expense.
  3. Choose a Payee, a Payment date, and a Payment method.
  4. From the Payment account drop-down menu, select the bank account you're reconciling.
  5. Under the CATEGORY column from the Category details, choose your Interest Expense account.
  6. Enter the amount of the interest charge.
  7. Click Save and close.

Once completed, you can continue reconciling your account. In addition, I've included a screenshot below for your visual reference.

 

 

Feel free to hit the Reply button below if you have any other questions about interest charges. I'll be happy to help you further.

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Anonymous
Not applicable

How do you record interest charges for credit cards?

jonpril_L,

Hello,

I was just reading about entering interest and credit card finance charges and your response prompted a question for me.

I have just set up 2 loan liability accounts and made sub accounts for the interest underneath them... as other liability and loan payables.

Should I be recording these to an Expense loan interest account under the PARENT Interest Paid account that came with the templated COA instead of sub accounts under loan payable/liabilities area?

Or do I just leave as is for the recording of the 'debt' there and then create the Interest Paid sub account for each loan under Expenses?

Sorry, very new to accounting and QBO.

 

Thanks so much!

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QuickBooks Team

How do you record interest charges for credit cards?

Thank you for joining the thread, @Anonymous.

 

I'd be glad to help share ways so you'll be able to record your transactions correctly.

 

If you're paying the interest on time, you can just create an expense transaction using the Interest Expense account. However, if you're paying it on a later time, you can create a journal entry debiting your Interest Expense and crediting your Interest Payable. Once you'll be paying the interest, you can create an expense transaction using the Interest Liability account. You can also make the Interest Payable Liability as a sub-account of the loan account if the interest is being incurred by the loaned money.

 

On the other hand, I'd also recommend consulting with your professional accountant for the accuracy of your accounts.

 

Please keep me posted if you have any other QuickBooks or entering interest and credit card charges questions by adding a comment below. I'll be always here to help you!

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Anonymous
Not applicable

How do you record interest charges for credit cards?

Thank you very much!

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Level 1

How do you record interest charges for credit cards?

I have a follow-up question. My credit card and checking account for my small business are linked to QB through QBO. And, yet, my finance and late fees from an old statement do not seem to have downloaded into the register for my credit card. As a result, I cannot reconcile my credit card account from that month. However, because my accounts are already linked, I do not get an option to add in fees or finance charges when reconciling. In this case,  how should I handle the fee and finance charges? 

Highlighted
Moderator

How do you record interest charges for credit cards?

It's good to hear from you, jlbrooksconsulti.

 

To record the fees and finance charges, you can create a Bank Deposit. You'll use an Income account if you don't have an invoice involved. However, if you have an invoice, use the Accounts Receivable. Enter the full amount and the customer's name. Add another line item for the small fees and use an Expense Account, then enter the amount as negative.

 

See the steps below for your reference:

 

  1. Click Banking at the top menu, select Make Deposits.
  2. In the Payments to Deposits window, select the payment/s that was deposited separately, then OK.
  3. In the Make Deposits window, on a blank line, select the overstated income account from the From Account column drop-down.
  4. Enter the negative amount in the Amount column. Make sure the Deposit subtotal is zero.
  5. Select Save and close.

You can learn more in the following article below: Deposit payments into the Undeposited Funds account in QuickBooks Desktop.

 

If you have any QuickBooks questions besides this topic, please feel free to let me know by adding a new comment below. I'll be right here to help at any time. Have a wonderful day!

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Level 1

How do you record interest charges for credit cards?

Hi. I was having the same problem as you. It is true that it is necessary to add an expense. But the person who explained forgot to mention that even if the expense is created successfully, you should adjust the date of the expense to be between the period you are trying to reconcile. It is very possible that you are trying to reconcile a period on your credit card that is earlier than today. So when you add the expense it will automatically take today's date and the quick book will not include it in the reconciliation because that charge for financial interest did not occur within the statement period. It did, in fact. You just added it with the wrong date.


Thank you

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Level 1

How do you record interest charges for credit cards?

Hello - 

 

I have this window on several credit cards - but on one card when I reconcile, it never comes up?

 

 

Highlighted
QuickBooks Team

How do you record interest charges for credit cards?

Hi, there @jpb2525.

 

Those accounts that have a "Register" are the only accounts that you can reconcile. You can check the category associated with your account by following these steps:

 

  1. Go to your Accountants menu.
  2. Select Chart of Accounts.
  3. Look for the account you want to reconcile.
  4. Hover your mouse on the account, and press right-click.
  5. Choose Edit Account.
  6. Change the account type.
  7. Click Save & Close.

 

For your future help, I'd also provide an article that helps you reconcile your account in QuickBooks Desktop.

 

Fill me in if you need more help by leaving a comment below. I'll be around in the Community to help. Take care and have a great day!

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