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

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: 

• Categorize and match online bank transactions. 
• Reconcile an account in QuickBooks Online. 

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

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! 

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! 

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!

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.

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!

I think this a better answer then the one above as it actually tells you what is the actual action for each option. I've chosen "Record as a Transfer" so that it will sync with what I have doing in the past. 

Just a small point of clarification here, the "record as credit card payment" option gives you the option to choose a vendor, but does not require it.

If there isn't any real difference between recording as a transfer and recording as a credit card payment, then why have the two options? Unless I just missed it before, the record as credit card payment option has not always been around. Surely there is a case where it is better, or was there really no point in making a new option?

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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@SarahannC wrote:

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: 

 

• Categorize and match online bank transactions. 
• Reconcile an account in QuickBooks Online. 

 

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

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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.

Hello there.

I appreciate you taking the time to give us detailed information about your situation. Let me share some insights about how to record transactions that were paid using your personal funds in QuickBooks Online (QBO). 

In QBO, it's best to link your bank or credit card accounts that are intended only for your business transactions rather than connecting the personal ones. This helps keep your books in order or accurate.

To ensure that this gets sorted out, you should disconnect your credit card account in QuickBooks and delete its transactions in the Chart of Accounts. You can then link an account that's intended only for your company. 

Moreover, if you've used your personal account to pay for business-related transactions, you can record a reimbursement. Let me guide you on how:
 

1. In your QBO account, go to +New, then select Journal Entry.
2. On the first line, select the expense account for the purchase.
3. Enter the purchase amount in the Debits column.
4. On the second line, select Partner's equity or Owner's equity.
5. Enter the same purchase amount in the Credits column.
6. Select Save and close.

For detailed steps, kindly visit: Pay for business expenses with personal funds.

Furthermore, I recommend consulting your accountant to be well-guided in your situation. 

Additionally. I'll also share this article that can serve as your reference to learn how to review downloaded bank and credit card transactions and put them in the correct accounts: Categorize and match online bank transactions in QuickBooks Online.

I'm looking forward to getting this resolved. Feel free to leave a reply if you require further assistance with recording transactions paid with personal funds in QuickBooks. The Community team always has your back. Keep safe.

I think QBO should get rid of this feature. It's clearly causing more confusion than benefit and even the QBO responder doesn't seem to have a good answer for the difference between the two options. 

Yes it is pretty obvious when the customer support person does not really have a clue what you are talking about, and clears the ticket by just guessing at which pre-canned answer from a list that seems to vaguely answer the question they wanted you to ask (and which I had already researched and read, hence my question) instead of giving you the answer the the question you actually asked, in specific detail. So either give them more useful answers to choose from, train them better, or let them send it to the "I have no idea how to answer this question" pile. Frustrating.