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My client had a purchase of supplies from Amazon with payment via Amex. There is Gift card from the receipt as a deduction from the cost of supplies. Now he said it is to be treated as cash because the gift card is some form of equity provided by him to the company. All i could think of is that gift card is like a prepaid debit card? Is this an Owner's Draw? He said the company should reimburse him to the gift cards redeemed .
Solved! Go to Solution.
Let's make sure that you'll be able to correctly track gift card in QuickBooks Online, allen25glenn.
A gift card is a prepaid debit card that is loaded with a specific amount, which can then be used to make purchases and other financial transactions. You can create a cash account to record gift cards if you purchase or receive gift certificates from your vendors. To do this, follow the steps below:
This records the certificate with its initial value as the balance of the cash account. You can check the account balance in the Chart of Accounts or the Balance Sheet at any time to see the certificate's current balance.
Once done, use it to buy products or services from the same vendor you got it from. Here's how:
Also, for more clarifications about gift card, I recommend reaching out to your accountant so they can explain further if these can also be tag as expenses taken from your business. Furthermore, QuickBooks provides several reports that will show you company's information in a more convenient and most efficient way. You'll just have to customise them to make sure you'll get the information you need. Learn from this article for your guide: Customise Reports In QuickBooks Online.
Feel free to let me know if you have any concerns about gift card. I'll be one post away if you need help.
Let's make sure that you'll be able to correctly track gift card in QuickBooks Online, allen25glenn.
A gift card is a prepaid debit card that is loaded with a specific amount, which can then be used to make purchases and other financial transactions. You can create a cash account to record gift cards if you purchase or receive gift certificates from your vendors. To do this, follow the steps below:
This records the certificate with its initial value as the balance of the cash account. You can check the account balance in the Chart of Accounts or the Balance Sheet at any time to see the certificate's current balance.
Once done, use it to buy products or services from the same vendor you got it from. Here's how:
Also, for more clarifications about gift card, I recommend reaching out to your accountant so they can explain further if these can also be tag as expenses taken from your business. Furthermore, QuickBooks provides several reports that will show you company's information in a more convenient and most efficient way. You'll just have to customise them to make sure you'll get the information you need. Learn from this article for your guide: Customise Reports In QuickBooks Online.
Feel free to let me know if you have any concerns about gift card. I'll be one post away if you need help.
Wow, thanks for this great explanation you have..
Hello, allen25glenn.
I'm happy that my colleagues were able to help and explain it further to you. We in the Community are always here to assist you anytime if you need additional assistance.
To further guide you in managing the growth of your business and sales transactions using QBO, I'd recommend checking out this article: QuickBooks Help Articles. It includes topics about account management, managing customers and income, and banking, to name a few.
Loop me in anytime here if you need another help or anything related to QuickBooks. Take care!
Adding on to this, how do you buy something from the vendor and include a cc payment for the expense that goes beyond the gift card amount. If I buy $100 worth of product and have a $45 gift card how do I add the $55 payment to the same transaction?
Hi bluemusic1,
You'll want to record the purchase as a bill, so you can pay for it twice. The first payment is by credit card, and the second payment is by applying the gift card.
If the gift card was given to you for free and it is currently accounted for as Other Current Assets in your books, you need to do a barter transaction to transfer the amount to A/P or to a barter account. This step turns it into vendor credits, which can be applied as a payment to the bill.
First, set up the barter bank account:
Second, move funds from Other Current Assets to the barter account:
Third, applying the gift card as a second payment:
You can always go back to this thread if you have more concerns. Take care and have a good one!
Thanks for your response. This was a gift card received for a return. I returned a product to the store, they gave me a gift card instead of money back. I used this to pay for a later purchase, partially with credit card. So, in this case I will create a bill and pay it with both payment methods.
How would I record a return with gift cards? Let's say i returned the $100 product. The vendor will give me $45 back in gift cards and $55 back on my credit card. Now I want to record a credit card credit but what is the correct way to do that?
Thanks for getting back to this thread, @bluemusic1. Let me chime in and provide some insights about recording returns with gift cards.
We can create a Credit Card Credit in QuickBooks Online to handle returns with gift card transactions.
When you start using the gift card for purchases, proceed to create an expense and attach the $45 amount. For detailed steps, please check out this article: Enter and manage expenses in QuickBooks Online.
Additionally, I'll be sharing these links you can utilize to help manage supplier transactions in QuickBooks:
Feel free to comment below if you have further questions about recording returns with gift cards. I'll be happy to help you. Stay safe
I see that the instructions listed are for entering a credit card credit. I wasn't clear with my question. My question is about using a credit card credit in conjunction with a gift card that is given instead of part of the money in the same transaction. I return $100 item, get $45 in gift cards back and $55 back on my credit card. I am not clear where to put the $45 in gift card dollars. In step 6 you say to input the amount, which I assume is only the amount that is returned to the credit card, in this example, $55. So my question is what to do with the $45?
Hi @bluemusic1.
In your case, I suggest creating a new bank account to put the $45 and name it Gift Card.
This way, you can create a credit card credit with the item's exact $100 and negate it with a $45 gift card. I also suggest consulting your accountant to ensure the amounts are accounted for accurately.
Here's how:
Once done, create a credit card credit. Under Category details, select the Gift Card account and enter the -$45 amount. Then in the Item details section, select the returned product and enter $100 as the amount.
Then you can use the Gift Card account for your future purchase.
You can reference these articles for more details:
Let me know if you need more assistance with tracking refunds and expenses. We're always here to help. Stay safe and more power to your business!
Thank you for your clear response. I understand the first part. However, this is not a product on my inventory. This is a product I bought from a vendor. When you indicate tumbler under Item details, does that mean I should add a new product to my products and services list every time I return something? Seems a bit cumbersome. Can't I add the expense account to the category field and on line two put gift cards to offset the total?
Hello, bluemusic1.
Yes, you're right. We need to add a new product in the product and services list so you can categorize it to the correct account and help you ensure your book is accurate.
For more details and how to use and manahe your expenses, please refer to ths article: Enter and manage expenses in QuickBooks Online.
Also, to further guide you in managing the growth of your business and sales transactions using QBO, I'd recommend checking out this article: QuickBooks Help Articles. It includes topics about account management, managing customers and income, and banking, to name a few.
If you have follow-up questions or concerns, please let me know. I'll be happy to answer them for you. Take care and stay safe.
This is a great explanation! I got my gift card for free and applied it to an Amazon purchase. How do I best record this? Because the gift card was free I don't think I can record it the same way.
It's nice to see you here in the Community, @acadofdiplomacy. I'll help you record the gift card into your QuickBooks account.
Since the gift card is free, you can create a wash account to move money from one account to another. This account normally has a balance of $0.00 because you always take out the same amount that you put in.
However, I would also encourage you to consult with your accountant when doing so. They can further guide you on the appropriate accounts to use in recording the gift card to keep your books updated.
Here's how:
For more details, see this article: Set up a clearing account. This is a US article, but it still works the same with your QuickBooks account.
Once you're done, you can use the clearing account when creating journal entries. Then, link them when you enter a receive payment transaction to zero out in case there's an overpayment.
Stay in touch if you need further assistance while working in QBO. Please know I’m always here ready to help and make sure you’re taken care of. Enjoy the rest of the day.
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