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PO's, CC Charges, Bills and how they relate

I'm essentially combing through a decade of prior business practices and want to clean up our QB records and introduce efficient processes.

 

I'm currently attempting the first CC reconciliation for the company in the QB system and I'm finding a lot of charges on the card that aren't in QB and some that are.

 

Question 1: 

When entering fresh CC charges into QB, is it necessary to have a previous PO to pair it to? If so, do I need to make a new PO for every charge not already in the system?

 

Question 2:

If the previous business practice was to enter a bill for the CC charges, do we still enter CC charges in addition to the pre-existing bills and somehow pair those? 

 

Question 3:

Is best business practice to have a PO, Bill, and CC Charge for each order we place with a vendor? If so, how does that affect job profitability reports?

 

Thanks for any advice you can offer. Trying not to screw up all of the companies reports while learning how to categorize each transaction for tax purposes.

1 Comment
QuickBooks Team

Re: PO's, CC Charges, Bills and how they relate

I've got you covered, AlchemySoundandVision.

 

I'd be happy to provide some clarification that could help you get in the right track.

 

In QuickBooks, there are two types of workflows for Accounts Payable (A/P). You can check out this article for more information about them: Accounts Payable workflows in QuickBooks Desktop

 

Now, to answer your first question, if you follow the first A/P workflow, then yes, it would be necessary to create a purchase order to pair your credit card charges. However, if you don't, then you can go ahead and just enter the charges.

 

For your next question, I'd say that it would be a good idea to enter and apply the CC charges to your existing bills, especially if they're still open. Doing this will ensure that your reports won't show an incorrect A/P balance. The steps below will guide you through the entire process:

 

Entering credit card charges

  1. From the Banking menu, choose Enter Credit Card Charges.
  2. Make sure the right account is entered in the Credit Card field.
  3. Select the right vendor from the Purchased From drop-down menu.
  4. Enter the Date and Reference Number (if necessary).
  5. Fill in the necessary details in the Expenses tab:
    - Account: Make sure to use the Accounts Payable account so you can pair this to your bill.
    - Amount: Enter the total amount of the charge.
  6. Click Save & Close.

 

To pair these charges to your bills

  1. From the Vendors menu, choose Pay Bills.
  2. Select the appropriate bills.
  3. Click the Set Credits button.
  4. In the Credits tab, make sure to select the correct credit (charge) is selected.
  5. Click Done, then Pay Selected Bills.

 

For your reference, I'm also including these articles:

Lastly, I'd recommend that you reach out to an accounting professional to verify if having a PO, Bill, and CC charge is the best practice to follow. With Intuit's Find-A-ProAdvisor site, you can search for certified professionals that can discuss options more personal to your business's needs.

 

I hope this response finds you with a smile today. Be sure to let me know if there's anything else I can do to help you succeed with QuickBooks. Thanks for reaching out, wishing you and your business the best.

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