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_elvia_
Level 2

Credit card payments

hi, I'm new to owning a sole prop & new to QB. Start date is 1/1/18 for both. 

I have made business charges to my personal credit card. I plan on using my business checking account to pay for the credit card bill. I have not added the personal cc to QB. 

How do I post the credit card bill payment to QB for this business expense?

 

Solved
Best answer January 31, 2018

Best Answers
Sangeethmathew
Level 6

Credit card payments

Hi,

Welcome to the community. 

 

As per IRS for taxation purposes a Sole Proprietor’s Incomes and Expenses will be clubbed together. Even Income from other sources. Be it personal or business.

 

Keeping this in mind I would suggest that you add your Credit Card to your QuickBooks. The below link will guide you on how to do it -

 

https://community.intuit.com/articles/1288999-add-and-connect-to-your-bank-and-credit-card-accounts

View solution in original post

NDLL
Level 3

Credit card payments

To catually answer your question.... You should have already added your bank account to the chart of accounts.  You will now want to add your credit card to the chart of accounts as well. 

 

click on the chart of accounts.  Push ctrl n on your keyboard to add a new account.  it is pertty straight forward on how to add.  Select Credit card of type of account, add account number, etc.

 

After that is finished you can enter in the charges on the card.  This is done on the top tool bar by goingto banking - enter credit card charges.  Much like the check entry you select the credit card account, enter the transaction jsut as would would if you had paid directly from your bank account.

 

After all of the transactions are entered return to the chart of accounts.  Right click on the credit card and select reconcile.  You will then enter the begining and ending balance before proceeding tot he nect screen. 

 

Once in the actuall reconcile screen select all of the transactions.  the difference on the bottom right of the screen should be $0.  If it is selct to reconcile.  A window will then appear that asks you if you want to enter the payment.  If you set you credit card to pay off the entire statement balance click ok.  it will then bring up a check pre-filled out for you to enter.  *if you paid less then the total statement balance you can change the amount before hitting enter. 

 

Once you ahve reached this step you are all done.  the payment is in your bank account register.

 

Hope this helps!

View solution in original post

NDLL
Level 3

Credit card payments

Ok then - providing all of the charges are company purchases I would do the following.

 

Modify the begining balance for the credit card to match the begining balance on your statement. 

 

chart of accounts - right click to use register - the top transactions should be your begining balance - double click on it and edit it.

 

Then add all of your transactions on the statement.  As long as you date December's transactions for December it will not affect this year's reports (you do need to actually enter in the year on each of them though b/c QB defaults to the current year always).  Then follow the steps I laid out to reconcile the account using the end date on the statement including the payment.  this will ensure your payment is in your checking register so that is on too.

 

Repeat the reconcilation for this months statement.  If while waiting for my reply you alreasy entered in this month's charges that is ok, you jsut have to individually mark the transactions on the reconcile screen instead of being able to click select all.

 

Side Note** In order for your bank account to be on this first month you will have to enter in all checks that you wrote in 2017, cleared the bank in 2018.  If you are writing off those expenses with your 2017 tax return, just make sure the checks are dated for the date you worte them and not the date they cleared. 

 

Hope this helps - we ahve all been there.

View solution in original post

NDLL
Level 3

Credit card payments

I assumed the business was pre-existing and they are just starting their QB as of Jan 2018.  If the business was new as of Jan 2018 I wouldn't think you would have business expenses in 2017, but if you do Jess is 100% correct, change the date of the transactions to after the 1st of the year so you get to write them off. 

 

If the Dec. charges were personal and you paid the entire statement balance out of the company account then you have to seperate them.  If that is the case write back and I can tell you how I would do it.

View solution in original post

18 Comments
Sangeethmathew
Level 6

Credit card payments

Hi,

Welcome to the community. 

 

As per IRS for taxation purposes a Sole Proprietor’s Incomes and Expenses will be clubbed together. Even Income from other sources. Be it personal or business.

 

Keeping this in mind I would suggest that you add your Credit Card to your QuickBooks. The below link will guide you on how to do it -

 

https://community.intuit.com/articles/1288999-add-and-connect-to-your-bank-and-credit-card-accounts

View solution in original post

EmilyCowan
Level 7

Credit card payments

Hi @_elvia_ - welcome to QB Community and congratulations on your new venture! As you ramp up you'll find lots of helpful info on our Learn & Support page. In particular, you may want to check out  this quick tutorial on recording expenses. I hope that helps!

 

If you get a chance, I'd love to hear more about your business :smileyhappy:

NDLL
Level 3

Credit card payments

To catually answer your question.... You should have already added your bank account to the chart of accounts.  You will now want to add your credit card to the chart of accounts as well. 

 

click on the chart of accounts.  Push ctrl n on your keyboard to add a new account.  it is pertty straight forward on how to add.  Select Credit card of type of account, add account number, etc.

 

After that is finished you can enter in the charges on the card.  This is done on the top tool bar by goingto banking - enter credit card charges.  Much like the check entry you select the credit card account, enter the transaction jsut as would would if you had paid directly from your bank account.

 

After all of the transactions are entered return to the chart of accounts.  Right click on the credit card and select reconcile.  You will then enter the begining and ending balance before proceeding tot he nect screen. 

 

Once in the actuall reconcile screen select all of the transactions.  the difference on the bottom right of the screen should be $0.  If it is selct to reconcile.  A window will then appear that asks you if you want to enter the payment.  If you set you credit card to pay off the entire statement balance click ok.  it will then bring up a check pre-filled out for you to enter.  *if you paid less then the total statement balance you can change the amount before hitting enter. 

 

Once you ahve reached this step you are all done.  the payment is in your bank account register.

 

Hope this helps!

View solution in original post

_elvia_
Level 2

Credit card payments

Thank you so much!

 

Along a similar subject-my business credit card bill is due.

The bill has December charges, and January charges (billing period 12/17/17-1/16/18). 

When I first set up the credit card account in QB, I gave it a starting balance.

Now that I want to reconcile it, it won't all match because there are Dec charges as well as Jan charges.

Do I enter two "Payments" for my bank account, splitting the Dec and Jan items?

:) 

jessbru99568
Level 7

Credit card payments

@_elvia_ I disagree with both answers here. 

If you are running a business, you do not combine personal credit cards and connect to your buisness. To record the transactions spent on your personal credit card, you can add your business bank account and when the payment posts, you can either split the payment and record to the correct accounts, or you can make a journal entry and post all the transactions to the correct account matching it to the payment in the bank feed. 

 

However, you never want to mix personal and business funds. It will only make it more confusing and hard for you. If you need to use your personal card, I would make sure to pay the balance of what you purchased with the business account. 

Hope this helps! :)

NDLL
Level 3

Credit card payments

Did the payment you made for last month's statement clear your bank before or after Jan 1st?

_elvia_
Level 2

Credit card payments

Last month's statement (end date 12/16/17) cleared my bank after Jan 1st.

 

NDLL
Level 3

Credit card payments

Agreed - if you use a credit card for business purchases it should ONLY be used for business expenses. *some small businesses have to start out using a 'personal' card because they can get approved for a company card yet.

 

If your card has mixed expenses - the company purchases should be entered in as reimbursements utilizing the vendor list. 

jessbru99568
Level 7

Credit card payments

Since the transactions were paid in January, you may be able to post a JE for the transactions in January. Also, when you add your bank account, QBs will automatically post an opening equity account to balance the bank account in the reconciliation. That may be the problem you are having in reconciliation. 

jessbru99568
Level 7

Credit card payments

@NDLL I completely agree. I know how that goes. When we started we had to use personal accounts and for us it became a mess, so that's why I try to warn about mixing the two. Its always best if they can be kept seperate. :)

NDLL
Level 3

Credit card payments

Ok then - providing all of the charges are company purchases I would do the following.

 

Modify the begining balance for the credit card to match the begining balance on your statement. 

 

chart of accounts - right click to use register - the top transactions should be your begining balance - double click on it and edit it.

 

Then add all of your transactions on the statement.  As long as you date December's transactions for December it will not affect this year's reports (you do need to actually enter in the year on each of them though b/c QB defaults to the current year always).  Then follow the steps I laid out to reconcile the account using the end date on the statement including the payment.  this will ensure your payment is in your checking register so that is on too.

 

Repeat the reconcilation for this months statement.  If while waiting for my reply you alreasy entered in this month's charges that is ok, you jsut have to individually mark the transactions on the reconcile screen instead of being able to click select all.

 

Side Note** In order for your bank account to be on this first month you will have to enter in all checks that you wrote in 2017, cleared the bank in 2018.  If you are writing off those expenses with your 2017 tax return, just make sure the checks are dated for the date you worte them and not the date they cleared. 

 

Hope this helps - we ahve all been there.

View solution in original post

jessbru99568
Level 7

Credit card payments

@NDLL if the business opened on 1/1/18 as was said in the OP question, they are not going to be filing a 2017 tax return and also the purchases will need to be posted after the date that the business was opened. 

NDLL
Level 3

Credit card payments

I assumed the business was pre-existing and they are just starting their QB as of Jan 2018.  If the business was new as of Jan 2018 I wouldn't think you would have business expenses in 2017, but if you do Jess is 100% correct, change the date of the transactions to after the 1st of the year so you get to write them off. 

 

If the Dec. charges were personal and you paid the entire statement balance out of the company account then you have to seperate them.  If that is the case write back and I can tell you how I would do it.

View solution in original post

jujubean67
Level 2

Credit card payments

I have a question - I have just received a credit card for our company. Normally, when I receive a statement, I would bulk the necessary expenses together (travel, meals, fuel, etc) and record anything that way. However, I am using the "Enter Credit Card Charges" under the "Banking" menu. So I can reconcile it just like I would my bank statements. When I am finished, I am taken to a window to enter the bill; however, I don't know to what expense to place this bill under. I cannot list it under "travel, meals, fuel, etc" because that doubles the amounts on my COA.

 

When I enter a credit card bill through this means, what expense do I put there?

 

Thank you - Joyce

Jonnybegood
Level 1

Credit card payments

 I also use a personal credit card for my business.  I have already added the card to quickbooks and have synced all the accounts with quickbooks.  I have two questions.  Some times I transfer payment from my personal account to the credit as well as from my business account.  The two questions are Q1: how do i make it so that the payment from my personal account doesn't look like business income?  Q2:  How do I set up the credit card payments so that they don't show up as an expense and how do I fix the transactions that do show up as expenses?  Basiclly my credit card payments are showing up as expenses how to i fix it?

MaryLandT
QuickBooks Team

Credit card payments

I'm here to help answer your concerns, Jonnybegood.

 

Credit card payments will show up as expenses since they're considered as your liabilities.

 

For payments downloaded on your personal account, you need to categorize them under an expense account. Check out this link to help review your bank transactions: Categorize and match online bank transactions in QuickBooks Online.

 

I'm adding this article to learn the entries on your bank register: How accounts are affected by debits and credits.

 

Stay in touch if there's anything else you need with your transactions. I'll be right here to help you.

Jonnybegood
Level 1

Credit card payments

I have the same issue.  I have added the personal card and my business checking to QBO.  My question is that I also use the card for personal items.  How do I seperare the payments?

ReymondO
QuickBooks Team

Credit card payments

I'll help you handle your personal expense in QuickBooks Online (QBO), @Jonnybegood.
 

Even though you should avoid mixing personal and business funds, sometimes it happens.
 

When you use a business account to pay for a personal expense, you should record it in QuickBooks. After that, you can reimburse the company.

Here's how to do it.
 

Step 1: Record a personal expense from a business account

  1. Select + New.
  2. Select Check or Expense.
  3. Select a Payee from the drop-down ▼ menu.
  4. Select the Bank AccountCash Account, or Credit Card you used to make the purchase.
  5. In the Category details section, select the drop-down menu ▼ to select the tax category that fits your need.
  6. Enter the Amount of the purchase .
  7. Select Save and close or Save and new.

Step 2: Reimburse the company

  1. Select + New.
  2. Select Bank Deposit.
  3. Select the Account to add the reimbursement to, and select the Date.
  4. Go to the Add funds to this deposit section. In the Received From field, enter the person who made the personal expense, then select the account. Tip: Add the person as a customer if they aren't in your books already. Even if they're not a customer, this is the best option.
  5. Select the Payment Method and enter the reimbursement amount.
  6. Select Save and close or Save and new.

 

You can see the following articles for information about owners or partners mixing business and personal funds:

 

Should you have any follow-up questions or concerns, don't hesitate to post again here in the Community or leave a comment on this thread. Take care and have a good one.

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