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We are a small, religious non-profit and I am relatively new to this position and Quickbooks/Accounting in general. In a lot of the tutorials and things that I am reading, I see entering credit card charges as a topic. Looking over our books, it would appear that we have never done it this way - the individual purchases/line items are accounted for in different lines on the check written to the credit card vs being entered individually as money is spent.
All of that being said, is there a specific reason or particular benefit to doing it the way the tutorials describe, or is the way that it has been done okay as well?
Thanks in advance!
-Alicia
Solved! Go to Solution.
The way you're doing it only works, sort-of, if you pay the credit card off every month in full.
However, the key issue with doing it this way is that puts your expenses in the month of the payment not the month they were incurred, which is usually the prior month, or even the one before that.
As a result, your P&L is never accurate for any given month, since your charges are not entered on the dates you make them.
It's a little like entering checks in your bank account only if they happen to clear, and then on the date they clear instead of the date they were written, though doing that will skew your books less in most cases.
The way you're doing it only works, sort-of, if you pay the credit card off every month in full.
However, the key issue with doing it this way is that puts your expenses in the month of the payment not the month they were incurred, which is usually the prior month, or even the one before that.
As a result, your P&L is never accurate for any given month, since your charges are not entered on the dates you make them.
It's a little like entering checks in your bank account only if they happen to clear, and then on the date they clear instead of the date they were written, though doing that will skew your books less in most cases.
We do pay it off every month, but that actually makes perfect sense, thank you!
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