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Level 1

Charge Account vs Credit Account

Our business has charge accounts (we have to pay them off every 30 days) and credit cards (we can carry a balance) right now we have all of those under credit cards in quickbooks. Is that the correct way to do it or should the charge accounts be accounts payable or line of credits?


If they should be accounts payable how do we do that, enter each charge as a bill and then one bill payment? 

1 Comment 1
Joesem M

Charge Account vs Credit Account

Welcome to the Community space, @Njackson412.


Accounts Payable is the record of outstanding bills for your business. This is used so you can track the money you owe. 


There are two available workflows in QuickBooks Desktop. If your business doesn’t track the goods and services you order then, you can Enter your bill and Pay your bill. However, if your business tracks the goods and services you order. Then you can:

  1.  Create a purchase order.
  2. Receive your inventory.
  3. Enter your bills against the inventory.
  4. Pay your bills.


Also, a Line of Credit account can't be used directly to pay vendor transactions because it is set up as a liability account. At the moment, we can only use cash, Bank, or a Credit Card Account to pay for vendor expenses. 


In case, you'll want to set it up as a credit card account, you can follow the steps below:


  1. Go to the List menu and select Chart of Accounts.
  2. Press CTRL + New, then select Credit Card.
  3. Click Continue and enter all the required details.
  4. Click Save and close.


However, before following the steps I've shared, I'd still suggest consulting your accountant. They can guide you on what method is appropriate to your business to make sure your book is setting up correctly.


I'm adding these articles that will help you manage your accounts in QuickBooks:



Don't hesitate to let me know if you have additional questions about working in QuickBooks. I'll be around to answer them. Have a good one.




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