Credit Cards with Parent Account Balancing

Thank you for sharing the breakdown of the amounts and in-depth details of your concern to discuss what help you need based on your initial post, Poobah.

Based on your scenario, you connected both the parent and sub-account of your credit card. When connecting the account, we must determine how your bank sends the downloaded transaction. If the bank entries download to one account, connect only the parent account. However, we need to connect the subaccounts and not the parent account if the transactions download to the individual accounts. We can’t connect both a parent account and its subaccounts since you’ll get a message that the account is already connected.

In your case, we'll have to disconnect all the parent accounts and then connect only the sub-account. This way, you'll only have to reconcile the  parent account (which you have already done) since all the transactions are rolled up into it. Here’s how to disconnect the parent account from online banking:

1. Go to Transactions, then Bank transactions (Take me there).
2. Select the tile for the bank account.
3. Tap the pencil icon, then select Edit account info.
4. Select the Disconnect this account on save checkbox. If QuickBooks is downloading new transactions, you won't see this option. Wait a few minutes for the update to finish and try again.
5. Press Save and Close.

You can refer to this link in disconnecting the subaccounts: Disconnect or delete an account from the Downloaded Transactions page. To set up a bank or credit card account with multiple subaccounts to easily connect it to your bank and reconcile downloaded transactions in QuickBooks Online (QBO), check out this article: About bank or credit card subaccount setup.

Then, we can run the Transaction Detail by Account so that you can see the debits and credits for your credit card transactions. Here's how: 

1. Go to Reports on the left side menu. 
2. Type in Transaction Detail by Account in the search bar.
3. Hit Switch to classic view, then click Customize. 
4. Tap Change columns, scroll down, and tick Debit and Credit.
5. Now click Filter, then choose the Transaction Type dropdown.
6. Tick Check and Expense
7. Click the Distribution Account and Account dropdown to specify the account you want to show in the report.
8. Once done, press Run report. 

Moreover, you can memorize this report. This feature simplifies the customization process, allowing you to concentrate on other essential tasks. Let me add this article on how to compare your bank statement and QuickBooks and review or change reconciliations: Reconcile an account in QuickBooks Online.

If you have further questions or need a helping hand in managing your credit card accounts and transactions, just let me know and I'll get back to you as quickly as I can. You have a good one. 

Thank you so much for your prompt and detailed reply! I appreciate you!

However, this does not appear to be my issue. (?)

Even though my credit card statement shows charges for both cards on one statement, the transactions are downloaded seperately for each card.  (Thank you Chase.)  I double checked, and I am downloading each card into each subaccount appropriately.  The transactions for each card are rolling up correctly to the parent account.  I have reconciled the parent account, and it balance is correct.  (This may not have been the case for all history however, because Chase changed their download process. (I followed your step 1.)

FYI- the steps for running the Transactional Detail by Account did not work for me.  My selection choices are different.  I do not have a classic view, there is not a Debit and Credit option to select....  so, I was not able to do this suggestion.

I read somewhere there might be a journal entry I need to make to record the payment to each card in the sub accounts? 

Still not fixed, and kind of lost at this point....   

Help?

We appreciate you for coming back, Poobah.

Yes, you are right, when it’s time to reconcile, we only need to reconcile the parent account since all transactions in the subaccounts roll up into it. Also, we only connect the parent account if the transactions download to one account. 

Since you don't have the Switch to classic view option, we can click the Gear icon on the report. Then, choose the Debit and Credit columns to be added to the report. See the screenshot for your reference:

On the other hand, QuickBooks Online (QBO) allows you to record credit card payments in multiple ways to keep track of your expenses. Here's how to record your credit card payments on each credit card account:

1. Click the + New Plus icon. 
2. Under Money Out (if you’re in Business view), or Other (if you’re in Accountant view), choose Pay down credit card.
3. Select the credit card you made the payment.
4. Enter the payment amount and the date of the payment.
5. Select the bank account you paid the credit card with.
6. If you made a payment with a check, click I made a payment with a check. In the Check no. field, enter the check number, or if you paid electronically, enter the EFT number.
7. If you want to add notes or file attachments, select Memo and Attachments and follow the instructions on the screen.
8. Press Save and Close.

For other options to record payments you make to your credit cards, check out this article: Record your payments to credit cards in QuickBooks Online. You can also create a journal entry to record the payment to each card in the sub-accounts. Since all businesses are unique, please reach out to your accountant for additional guidance to ensure the on what account you need to apply when recording the transaction.

Once done, we can now reconcile your credit card transactions. Here's how:

1. Go to the Gear icon, then select Reconcile. You can also select Reconcile from the Transactions tab in the MENU ▼.
2. If it's your first time, select Get started and Let's do it.
3. Choose the credit card account. Then, enter any missing transactions (if there are any) from the statement and adjust any incorrect transactions.
4. Once the difference is zero, click Start reconciling.
5. In the Reconcile screen, select the checkbox next to the transactions that match the transactions on your statement to mark it as cleared.
6. Press Finish now, then select Done.

Feel free to visit our Banking page for more insights about bank feeds and reconciling accounts.

If you require additional assistance with your credit card accounts or other QuickBooks-related, please do not hesitate to leave a comment. I am always available to lend a helping hand. 

Poobah, did you ever figure this out? I’m in the exact same situation and those wonky extra numbers for the subaccounts are driving me mad.

Chaoscoordinator, I'm having this issue too. I don't think the QB's employee understood Poobah's question. I thought I read somewhere that you have to do a journal entry on the sub accounts to zero them out, but I'm not 100% sure. I'm still searching. 

Yes, you have to a journal entry each month: debit the sub account(s) for the monthly charges per bank statement and credit the parent account for the same amount.

hello did you ever get this figured out? I amin the same situation and cant figure it out.

Hello, Jennfr00.

This is to ensure smooth transactions when connecting your credit card with your parent account balance in QuickBooks Online (QBO). I want to verify if you've tried the solutions provided by my colleague. If you haven't tried, you can follow the steps provided above.

In this scenario, both sub-accounts will show different sub-totals and their balances will be combined into the parent account's total. For the workaround, you need to create a journal entry each month with debit the sub-accounts for the monthly charges as per the bank statement and credit the parent account for the same amount. Here's how:

1. Select + New.
2. Select Journal entry. On the first line, select an account from the Account field.
3. Depending on if you need to debit or credit the account, enter the amount in the correct column.
4. On the next line, select the other account you're moving money to or from. Depending on if you entered a debit or credit on the first line, enter the same amount in the opposite column.
5. Check the amounts - you should have the same amount in the Credit column on one line and the Debit column on the other. This means the accounts are in balance.
6. Enter information in the memo section so you know why you made the journal entry. Select Save and new or Save and close.

For more details and to learn how to record journal entries in QuickBooks Online check this article: Create journal entries in QuickBooks Online.

Once done, you can reconcile your accounts again. Make sure to select the parent account to avoid discrepancies.

These articles provide further details about recording opening balances after the initial setup:

• What To Do If You Didn't Enter An Opening Balance In QuickBooks Online
• Enter And Manage Opening Balances In QuickBooks Online

To help you master bank reconciliation in QuickBooks Online, we recommend bookmarking or saving these articles as well:

• Fix Issues The First Time You Reconcile An Account In QuickBooks Online
• Reconcile Transactions That Are Older Than Your Opening Balance In QuickBooks Online

I'm always available should you need additional assistance managing your transactions in QBO. It's great to have you in the Community.

What the employee below suggested is correct, it's all about journal entries to balance everything out. There were two things that threw me for a loop. One was my five Chase cards were an existing account and only the primary card was pulling data from Chase. Balancing the pre-existing balances was a challenge. Seems like it would be much easier starting from a brand-new account. Second is that the payments post on the primary card holders account, which also requires another journal entry to make everything balance. 

Interesting discussion about credit card account balancing! For businesses needing to verify financial reliability during hiring, we've found https://www.rapidhiresolutions.com/background-check-providers/ invaluable for thorough screenings. Thanks for sharing this detailed breakdown - it's helpful to see how others handle accounting challenges!

You are correct about transferring the subaccount balances to the parent account.

I do not know about the person who answered this question but it is wrong. The steps for reconciling a credit card account with multiple credit cards that have setup as sub accounts are as follows.

The beginning balance should be zero, so if you get an opening balance when you connect a credit card to a subaccount, and it is correct you should change the category to the parent account. 

If the credit card is a new credit card on an existing credit card account, it should not have a beginning balance to worry about.

NOTE: The parent account should NEVER be linked to a bank, only subaccounts should be linked. If there are transactions that do not hit any of the accounts credit cards, then create a subaccount for those transactions: "[Use th credit credit card parent category name] Other". The parent account should never have anything categorized to it directly.

Now the steps:

A: Reconcile all subaccounts first, before reconciling the parent account

1: Ensure that the beginning balance in the reconciliation tool is zero.

2: Enter, always enter, the ending balance as zero

3: Enter the statement date you are reconciling and select 'Start reconciling'.

4: Reconcile to the Charges and Payments numbers so that they equal the transactions for that subaccount's credit card

5: When the Charges and Payments match the credit card statement for that credit card, the difference is the amount to be transferred to the parent account.

6:Transfer the difference amount to the credit card parent account.

NOTE: You can use a J/E if you know how or you can use the Transfer form. If using the transfer form the following rule applies:

• If the differnce is a negative number the transfer is FROM the Parent TO Subaccount
• If the difference is a positive number the transfer is FROM the Subaccount TO Parent

6: Repeat steps 1 through 6 for each of the subaccounts including the "Other" subaccount if you needed one.

After all the credit card subaccounts have be reconciled and transfered to the parent you are now ready to reconcile the parent account. 

1: Selecting Reconcile (from the list under Accounting in the new User Interface) will open the reconciliation tool -Check to make sure that the Begining balance field matches the Previous balance on the credit card statement.

2: Enter the New balance from the credit card statement into the Ending balance field

3: Enter the statement ending date (do not confuse the statement date with the payment due date).

4: Select 'Start reconciling'

5: When the reconciliation tool opens to the transactions list of the reconciliation tool the only items that should show are the transfer amounts that were transferred into the parent account from the subaccounts.

If there are any other transactions showing, research them and find out where they should have actually been categorized.

If you find that you have already entered them into a subaccount manually, since you could not find them when reconciling the subaccounts, you can click on the transaction while in the reconciliation tool and void them, [suggestion: Put the amount of the transaction in the memo box before voiding, this will allow the search tool to find them by amount should you need to unvoid the transaction].

6:Now check off the transfers from the subaccounts and you should have a zero difference, if the subaccounts are all reconciled correctly.

One of the reasons this is the Best Practice [as taught by the QBO Experts at Intuit] for credit card accounts with subaccounts is that it keeps you balance sheet clean and shows only the current liability for the credit card account as a whole.

No large negative liability for the card subaccount that all the payments are applied to and no large liability showing in the subaccounts. I have seen banks and the SBA get a little antsy about giving loans to companies with large credit card subaccount liabilities showing on the balance sheet. Lots of back and forth explaining that would not have been neccessary if the Best Practice method was used to reconcile a credit card account with multiple credit cards/subaccounts.

Vaden Haynes - Optumus Bookkeeping, Ltd. QuickBooks Online ProAdvisor Level 2 (previously called Advanced)

You are correct about transferring the subaccount balances to the parent account.

I do not know about the person who answered this question but it is wrong. The steps for reconciling a credit card account with multiple credit cards that have setup as sub accounts are as follows.

The beginning balance should be zero, so if you get an opening balance when you connect a credit card to a subaccount, and it is correct you should change the category to the parent account. 

If the credit card is a new credit card on an existing credit card account, it should not have a beginning balance to worry about.

NOTE: The parent account should NEVER be linked to a bank, only subaccounts should be linked. If there are transactions that do not hit any of the accounts credit cards, then create a subaccount for those transactions: "[Use th credit credit card parent category name] Other". The parent account should never have anything categorized to it directly.

Now the steps:

A: Reconcile all subaccounts first, before reconciling the parent account

1: Ensure that the beginning balance in the reconciliation tool is zero.

2: Enter, always enter, the ending balance as zero

3: Enter the statement date you are reconciling and select 'Start reconciling'.

4: Reconcile to the Charges and Payments numbers so that they equal the transactions for that subaccount's credit card

5: When the Charges and Payments match the credit card statement for that credit card, the difference is the amount to be transferred to the parent account.

6:Transfer the difference amount to the credit card parent account.

NOTE: You can use a J/E if you know how or you can use the Transfer form. If using the transfer form the following rule applies:

• If the differnce is a negative number the transfer is FROM the Parent TO Subaccount
• If the difference is a positive number the transfer is FROM the Subaccount TO Parent

6: Repeat steps 1 through 6 for each of the subaccounts including the "Other" subaccount if you needed one.

After all the credit card subaccounts have be reconciled and transfered to the parent you are now ready to reconcile the parent account. 

1: Selecting Reconcile (from the list under Accounting in the new User Interface) will open the reconciliation tool -Check to make sure that the Begining balance field matches the Previous balance on the credit card statement.

2: Enter the New balance from the credit card statement into the Ending balance field

3: Enter the statement ending date (do not confuse the statement date with the payment due date).

4: Select 'Start reconciling'

5: When the reconciliation tool opens to the transactions list of the reconciliation tool the only items that should show are the transfer amounts that were transferred into the parent account from the subaccounts.

If there are any other transactions showing, research them and find out where they should have actually been categorized.

If you find that you have already entered them into a subaccount manually, since you could not find them when reconciling the subaccounts, you can click on the transaction while in the reconciliation tool and void them, [suggestion: Put the amount of the transaction in the memo box before voiding, this will allow the search tool to find them by amount should you need to unvoid the transaction].

6:Now check off the transfers from the subaccounts and you should have a zero difference, if the subaccounts are all reconciled correctly.

One of the reasons this is the Best Practice [as taught by the QBO Experts at Intuit] for credit card accounts with subaccounts is that it keeps you balance sheet clean and shows only the current liability for the credit card account as a whole.

No large negative liability for the card subaccount that all the payments are applied to and no large liability showing in the subaccounts. I have seen banks and the SBA get a little antsy about giving loans to companies with large credit card subaccount liabilities showing on the balance sheet. Lots of back and forth explaining that would not have been neccessary if the Best Practice method was used to reconcile a credit card account with multiple credit cards/subaccounts.

Vaden Haynes - Optumus Bookkeeping, Ltd. QuickBooks Online ProAdvisor Level 2 (previously called Advanced)