How do I enter a cash back credit?

Make your Rewards account either Other Income or Other Expense.

As Other Income, it is not part of Gross Receipts.

As Other Expense, it will run negative because it Reduces the total expenses you can report.

And either way, it falls to the bottom of the P&L.

You use the Card Provider's name as payee on the payment transaction. You can use that same name on the Credit.

Same difference: Name for this transaction. They are the company that gave you this credit. Payee = Purchased From, for cash and checks, right?

Does this workflow/instructions apply to QB Desktop Pro?

Hello EBFinancials,

Welcome to the Community. I'm here to assist you with any questions you may have concerning cash back rewards in QuickBooks Desktop.

The process of recording cash back rewards are almost the same with QuickBooks Online. You can track the points until you use them.

These rewards are income to the business either you apply them as a credit reducing the balance or acquire a check and create a deposit.

You can create an Other Income account by following these steps:

1. Click the List tab at the top menu bar.
2. Select Chart of Accounts.
3. Click the drop-down arrow next to Account.
4. Click New.
5. Choose Other Account Types, and select Other Income.
6. Click Continue.

Please know I'm always available anytime you need assistance concerning the process. The Community will be sure to get back to you.

LLC owner in Arizona here. I've had my company taxes prepared by a professional CPA firm here in Arizona for a decade, and cash back rewards for cards are considered as rebates by the IRS. We've been filing as such for years, no problems. Please contact a CPA or other tax professional in your jurisdiction, your mileage may vary, but I thought my experience could be valuable here.

very new to this program

It's nice to see you here in the Community, @sneligan.

You can enter the cashback credit as an income to your company. I can guide you through the steps.

As mentioned above, you can continue to track your cashback rewards until you utilize them.

You'll need to create an income account for your points. Here's how:

1. Click on Lists from the menu bar.
2. Choose Chart Of Accounts.
3. From the Account drop-down, select New.
4. Select Income from the Account Type window.
5. Click on Continue.
6. Enter the Account Name and other details.
7. Click on Save & Close.

Once done, you can now record the cashback credit. You can follow the steps below:

1. Click on Banking from the menu bar.
2. Choose Enter Credit Card Charges.
3. Enter the name on the Purchased From field.
4. Select the account you created.
5. Enter the amount of the charge.
6. Click on Save & Close.

You can always get back to me if you have any other questions or concerns. I'll only be a post away.

I logged my cash back redemption to my CC account as a postive add under "Uncategorized Expenses"

This balanced my books without the redemption being counted as income - because to me it is not income and I should not be taxed on cash back rewards...right or wrong, that's how I solved it....

Would it haveto go under refund/credit not purchases/charges because the company is getting cash back not being charged?

My question is more about reconciling accounts year-end. Example: I buy something for $100 with my CC and get $1.00 "cash back" in the form of a statement credit. So if I book this credit to an other-income account then pay the remaining balance due of $99 from checking, that would leave a QB balance for my CC of $1.00. Do you recommend journal entries once a year to resolve this?

I appreciate the detailed scenario, TheDude2020.

Your suggestion on creating a Journal Entry can work, here's how: 

1. Click Company on the menu.
2. Select Make General Journal Entries.
3. Fill out the fields to create your journal entry. Make sure your debits equal your credits when you’re done.
4. Select Save & Close.

Check out these articles for reconciliation reference:

• Learn the reconcile workflow in QuickBooks 
• Fix issues when you're reconciling in QuickBooks Desktop 

I also recommend checking with your accountant to make sure you're doing it correctly.

We use Quick Books Online and after I choose OTHER INCOME, there is a DETAIL TYPE option, where I have to make one more choice. The options are:

Dividend Income

Interest Earned

Other Investment Income

Other Miscellaneous Income

Tax-exempt Interest

Neither one of them sounds right.

I don't see these as a discount on purchases so I wouldn't put it against Office Supplies or gas. Why not enter them as negative expense items in "Bank & Credit Card Fees"? The bank charges me to use the credit card and other accounts and, sometimes, it discounts/rebates some of those fees because they "like" the way I'm using the accounts. This could get confusing if the rebates exceed the fees in a particular period but if that happens you have a nicer bank than I do. ;-)

Do we approach this the same way if it is a "bill credit"?  In my case, it was "spend X and receive Y back on my bill" (a credit/discount, not cash)...

THANKS!

Yes, you can approach the amount your vendor deducts from how much you owe as a bill credit, @cschmookler. I'm here to guide you how.

Entering a bill credit in QuickBooks will depend on the product that you're using. If you have QuickBooks Desktop (QBDT), here are the steps on how to enter a bill credit:

1. Go to the Vendors menu.
2. Select Enter Bills.
3. Click the Credit radio button.
4. Enter the Vendor name.
5. Select either the Expenses or Items tab, then enter all the necessary details.
6. Select Save & Close.

On the other hand, if you're using QuickBooks Online (QBO), make sure to first create a Vendor credit transaction. This way, you'll be able to record the category, product, or service you've received. After that, you can apply it to a bill. Here's how:

1. Go to the + New button.
2. Select Pay bills.
3. Choose a bill for your vendor from the list.
4. You'll see the available credit with this vendor in the Credit Applied field.
5. Complete the rest of the fields, then click Save and close.

After the process, you can pull up a vendor report to check the accuracy of the bill credit you've created. For QBDT, go to the Reports menu, then select Vendors & Payables. While for QBO, go to the Reports menu, then visit either the Expenses and vendors or the What you owe section to choose the report you want.

Please let me know if you have other concerns. I'm just around to help. Take care always.