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What is the difference between "record as transfer" and "record as credit card payment" in Quickbooks online?

Forum|Forum|5 years ago
February 22, 2021
3 replies
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Both the credit card and checking acct used to pay off the credit card are synced w/ QB and the bank feeds are downloaded automatically. When I go to record the transaction to the register - there is an option to "record as transfer" or "record as credit card payment" what is the difference between these two options and which one should I be using?

QuickBooks Online

Best answer by SarahannC

Hello there, usernmiller. Thanks for getting back to me.

You can actually record the payment or transaction either as Record as transfer or Record as credit card payment in QuickBooks Online. These options depend on how you want the system to handle the regular credit card you used for this transaction.

In this case, I'd recommend reaching out to your accountant for further assistance. They can ensure that the transaction will be recorded correctly according to your needs. This way, your bank transaction will keep accurate and prevent messing up your data. If you don't have an accountant yet, you may want to use this link to find one: https://quickbooks.intuit.com/find-an-accountant.

From time to time, you can visit these articles to gather more details when reconciling accounts in QBO:

Please stay in touch if you have other questions in regards to this or anything about QuickBooks. I'm here whenever you need more information. Take care and have a good one.

S

SarahannC

Level 9

Hello there, usernmiller.

Let's differentiate between Record as transfer and Record as credit card Payment in Quickbooks Online.

Record as transfer is used to move money from one account to another within the same financial institution. While recording as credit card payment is specific to credit card only. This option helps you have a prepaid credit card and transfer to use it. If using a regular credit card, you'll be credited by the bank. Then, you pay it at a later time.

In this case, it depends on how you can record the transfer in the register. You may want to use this link I've added below to learn more about organizing your transactions from the Banking page:

Please let me know if you have other questions. Take care and stay safe.

U

usernmillerAuthor

I am using a "regular" credit card but the payments are automated and show up in the QB bank feed. All I have to do is add the payment to both the credit card that is being paid and the checking account it is being paid from. I know how to categorize and add general expenses, but I also know credit cards are not considered expenses, rather liabilities, and I have the chart of accounts set up to correctly categorize the transaction as so.

I have attached a screenshot for an example of a transaction. In this instance should I be using the record as credit card payment? Does this just differentiate the transaction from a general transfer of funds? A step by step process from this view would be very helpful. Thank you!

C

confused_office_mgr

I have the same exact question as usermiller. And I would like to pose the question again because the answer provided is not very clear. A more thorough explanation would be helpful and greatly appreciated.

Thank you.

Jen_D

Level 8

Thanks for reaching out to the QuickBooks Community page, @confused_office_mgr,

Allow me to share some more insights about the credit card payment options in QBO. When you pay your credit card dues, there are several ways to record payments.

There is not much difference with the "record as transfer" and "record as credit card payment", as it's main function is to offset the liability.

If the CC and the paying bank account are both connected for online banking, the system will let you record a payment as a transfer. This means that you are directly transferring the funds from the bank to categorize the CC payment. Reduce the bank balance and the CC liability.

It goes the same way as using the Record as credit card payment option. The only difference, is it requires you to add a vendor name to it. The entry is then added to the list of transaction under the name specified on the payment.

To give you some more ideas about recording CC payments, please see this article: Record your payments to credit cards

Let me know if there's anything else I can do to help you. Reach out back to me again so I can assist you again. Have a good one!

D

DogsBreakfast

To clarify, if transferring the funds, they do not have to be from within the same institution; they both just need to be connected to CBO. Correct?

The pages and pages of "explanation" above seem to me to do little to demystify the original question, which is a question that I also have.

Perhaps it would be more useful to explain what the two options actually do rather than trying to stab at a scenario or two to describe when it might be useful to use one versus the other, which always leaves you somewhat guessing what it really actually does.

I would like to work out how it really works, so I can figure out my own question...

I have a credit card. It is actually my personal card, linked to the company in Quickbooks Online because sometimes I use it for business transactions. Even though it is my card (not a company card), QBO thinks of it as a company liability in the balance sheet, which is fine I think.

If I make a repayment on the card out of electronically transferred cash from my personal bank account (that is not linked to QBO) then I will add the amount I pay on the card to the amount the company needs to pay me back - by adding a similar amount to the Directors' Loan liability account.

So I am moving an amount of funds from the directors loan account to the card account. Take money off the card debt (owed to the bank) and put it on the directors loan debt (owed to me).

The card transactions are linked and loaded into the card statement. This is why I see the transaction appearing in my Banking "To Review" section. Now, the question is, what option do I select for making the payment in there?

Let's say I pay $100 off the card from my personal account. I think I want -$100 added to the credit card balance (I paid it off, the liability is reduced). And at the same time I want +$100 added to the directors loan liability (the company owes me more). And I want the transactions linked or matched so I know what was which.

So I think I am doing a CREDIT CARD PAYMENT which is also a TRANSFER. Note I am the only director, so I don't need to split up debts in the directors loan account; I don't need any additional labelling.

Which of the two cryptic options should I select in this case? Does it even matter? What will happen when I do one vs the other?

FWIW, my guess is the two options functionally do the same thing to the ledger balances.

R

rpanday

When I am transferring funds between two asset accounts I record them as a transfer. But when I am paying for a credit card I would record the transaction as Credit Card Payment

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