Credit Card Payments Creating Negative Equity Balance

Hi there, accounts-payable.

A negative balance in Credit Card account can be caused by incorrect opening balance or transactions that are older than the opening balance. Also, missing or duplicate transactions, and the opening balance QuickBooks enter when you connect your credit card accounts online.

To fix this, let's start by reviewing the opening balance entry in the Chart of Accounts. Here's how:

1. Select the Accounting menu, then select Chart of Accounts.
2. Find the account on the list.
3. Select View register to get more details.
4. Search for the opening balance entry. It should have Opening Balance Equity in the Account column.
5. Make a note of the date and balance. 

If you forgot to enter an opening balance, but, you're already tracking transactions in the account, you can enter the opening balance manually so your accounts stay balanced. 

Then, compare the balance on your bank records to what you entered as the opening balance in QuickBooks. If the amount doesn't match your statement, edit it:

1. Go back to your bank register.
2. Select the opening balance entry to expand the view.
3. In the Deposit column, edit the balance so it matches your bank records.
4. Select Save.
5. Hit Yes to confirm.

Once done, run the Balance Sheet and Trial Balance reports or start reconciling again. If you get the same result, I recommend the additional resolutions in the following article to make sure the opening balance is correct: Fix beginning balance issues in QuickBooks Online. You can go directly to Step 2.

However, if you  recently entered older transactions that come before your opening balance, please refer to the article below to reconcile them: Reconcile Older Transactions.

Meanwhile, when creating transactions from the credit cards you'll need to select the correct Expense accounts or Accounts Payable if there's a bill.

Additionally, when downloading bank transactions, QuickBooks Online recognizes a match if they have the same transaction date, total amount, or description. To avoid duplicates, check this additional reference to categorize downloaded transactions:  Match and categorize your downloaded bank transactions.

For more information and QuickBooks reconciliation workflow, please check this article: Reconcile Hub.

If I can be of any additional assistance, please don't hesitate to let me know. Have a good one. 

Thanks, I will have a look at your suggestions.  The interesting part is once I opened my accounts, I also started quick books, so my beginning balances should all be 0.  I'll reply with what I find after I read your suggestions more thoroughly.  Thanks!

Hi, @accounts-payable.

Thanks for reaching back out to the Community. I'm glad that we were able to provide you with some information to help resolve your issue.

I'll be on standby if you have any other questions.

Hello,

I am having a similar issue- I have a chase credit card and four sub accounts underneath it. Two of the sub accounts are not communicating correctly with the main card. When I reconcile the credit card two of the sub accounts write off the balance into the opening balance equity but two of them do not. This has left the two not working with huge balances that are not correct but the main account is correct. Every time I try to write off the incorrect balances it then makes the main account into a huge negative balance! Is there anyway I can write this off with out messing up the main credit card account?

I'm here to share details about how parent and subaccount setup works in QuickBooks Online (QBO), @heatherpycior995. This way, you're able to perform the reconciliation process accordingly.

You're able to set up a credit card account with multiple subaccounts to easily reconcile downloaded transactions in QBO. When you connect to online banking, the same opening balance transaction may download to all subaccounts. You must delete all but one of these balances when you reconcile.

In line with this, all your transactions in the subaccounts roll up into the parent credit card account. That being said, there isn't a need to write off the incorrect balances with two of your subaccounts when you reconcile. To know more about this, I'd recommend checking out this article: About bank or credit card subaccount setup.

Once your transactions are downloaded, you'll have to review and/or match them to the existing entries in QuickBooks. This way, you can keep your account updated. You can refer to this article to know more about this: Categorize and match online bank transactions in QuickBooks Online.

After that, you're now set to reconcile your Chase credit card account in QBO. I'd recommend performing this process every month to effectively monitor your business expenses. For the step-by-step guide, you refer to this article: Reconcile an account in QuickBooks Online.

Let me know if you have other reconciliation concerns or inquiries about managing your credit card's parent and subaccounts in QBO. I'm just around to help. Take care always.

Hi,

Thank you for your response! I am not sure you understand the problem that I am facing.

I have set up four chase sub accounts all part of one main credit card account. I entered and reconciled  the entire year for 2020. I always reconciled the main credit card  account leaving the main credit card balance to be correct but two of the sub accounts have incorrect balances (they have the balance for the entire year. ) This is causing issues with the companies balance sheets. I have tried to allocate the incorrect  balances to opening balance equity and reconciliation discrepancies but when I do this it causes a negative balance in the main credit account. How can i fix this ?

Hi there, heatherpycior995.

Thank you for checking out the Community. I'm here to help you sort this out.

Posting the transactions to the parent account will not impact the sub-accounts. Otherwise, posting them to the sub-accounts will affect the main account. You can check the parent account for entries with no sub-accounts assigned to it. Then, move the transactions to the corresponding sub-accounts. I'll show you how.

1. Click the Accounting menu.

2. Select Chart of Accounts.

3. Locate the appropriate account for the transaction.

4. Click the View register link from the Action column.

5. Select the transaction you want to edit to open the field.

6. Click Edit to go to the corresponding transaction form.

7. Enter your changes.

8. Hit Save.

You can check out this article in case you need to undo or remove transactions from reconcile.

Let me know if you have further questions about reconciliation. We're always here to help you out.

There are no double entires, all transactions are allocated to the correct sub account.

I can share some insights to resolve this account balance in QuickBooks, @heatherpycior995.

If you’ve paid back the credit card balance, make sure you create a credit card credit in QuickBooks Online. The same process applies when you transfer the sub-account balance to its parent account. This way, so you can connect the transaction to the account used in its original purchase.

You can also reach out to your accountant for assistance. He/she can provide some advice to get rid of the negative balance of your Credit Card account.

For more tips and information to manage your account and business finances, visit our support page. This contains resources, webinars, and training videos to help you learn more.

Don't hold back to drop a comment below if you have other account questions. We’ll be here to help. Take care!

What was thee solution to the issue which I am experiencing? Payment is made from a Checking Account. The checking and credit card transactions both show up correctly. However, the running balance in the CC account is negative.  

Did you ever figure this out? I can't believe we still have to figure out how to balance the sub accounts. Thanks

I'm here to support you and explain further about subaccount balancing in QuickBooks Online, @mistymossy.

We aim to provide you with a better experience than you are currently encountering. Allow me to chime in and share how parent and sub-accounts work in QBO. This way, I can guide you accordingly. 

The same opening balance transaction may download to all subaccounts when you first connect your account. Then when you reconcile, you must delete all but one of these balances.

Some financial institutions may display the overall bank balance at each subaccount level. This is due to the bank's provision of a static account balance rather than the balance of each subaccount. For more details, see this article: About bank or credit card subaccount setup.

If you have a negative balance in your Credit Card account, this can be caused by an incorrect opening balance or transactions older than the opening balance.

Moreover, remember to reconcile your credit card accounts regularly to ensure your book will always stay accurate. 

Lastly, check out the articles below to learn how to unreconcile a single transaction from a completed reconciliation and how a Balance Sheet report is different from other reports:

• Undo or remove transactions from reconciliations in QuickBooks Online.
• Run a Balance Sheet report in QuickBooks Online.

Don't hesitate to tell me if there's something else I can do. I'll always be here to help you. Keep safe, @mistymossy.

Thanks for the reply.

So, after I reconcile and the main account is zeroed out, go into each sub account and delete what? If I delete the transactions they will be deleted from the parent account.

Thanks for the quick response, misty. I'll share additional inputs with what my colleague mentioned above about the parent and sub-account setup in QuickBooks Online (QBO).

When you connect to Online Banking with QBO, the same opening balance transaction may automatically be downloaded to all your subaccounts. Thus, you'll have to clear the opening balance equity transaction from the register to correct the balances.

Furthermore, you're correct that you'll have to reconcile the parent account only because all transactions in the subaccounts roll up into it.

Also, the parent account's balance will normally be zeroed out after reconciling it. Rest assured that each subaccount balance is accurate once the parent account has been reconciled based on the transactions on your bank statement.

For additional reference, here's a resource about reconciling an account: Reconcile an account in QuickBooks Online.

Please let me know if you have other concerns about managing your account balances and transactions. You can drop a comment below, and I'll gladly help. Have a good one.