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Using Manual Entries with Credit Cards in QuickBooks

There are two ways to manually input charges in QuickBooks, by detail and by summary. (For automated downloads, refer to our tutorial Automated Entries with Credit Cards in QuickBooks.)

The advantage of the detail method is that QuickBooks contains a record of each transaction. The summary method is faster, but for transaction detail, original statements must be consulted. Another drawback of summarized entry is that it negates job costing and reimbursable expense tracking for individual transactions.

In this example, we’ll use the following Credit Card Statement for Robert Jordan, President of XYZ Industries.

If entries are made contemporaneously with charges, you will be ready to reconcile the account as soon as the statement arrives. Most businesses, however, input credit card data after receiving the statement. The following procedures assume that you do not download web-connect (.qso) files from the bank and that you do not record credit card charges 

For the moment, we’ll ignore the payments and credits section and input Purchases and Adjustments. First, we’ll enter the Lowe’s Long Beach Charge.

I. Credit Card Entries Using the Detail Method:

A. Entering Charges:

Go the the Banking menu … Enter Credit Card Charge

The Credit Card Purchase/Charge window opens. To enter the charge;

  1. Select the Credit Card
  2. Select Purchase/Charge
  3. Enter the Vendor
  4. Enter the Date
  5. Enter the Reference Number
  6. Enter the Amount
  7. Select the Account to charge (alternately, choose the Item that was purchased if Items are used)
  8. Complete the Memo section if desired
  9. Save and Close to enter the charge.

Repeat this for all the charges.

B. Entering Payments and Credits.

Next, we’ll look at posting Payments and Credits from the sample statement.

An important thing to note is that it is not necessary to post Payments made on the card. This is because they have already been posted—when you made the check originally. This is illustrated in our example by looking at the $750.00 payment appearing on the Credit Card statement Payments section above: Here is the check written and mailed for the

Note that the account used for the check was “Visa 555.” This is the payment that appears on the Credit Card statement.

Credit Card credits from vendors are another matter, unless they are entered contemporaneously with the credit. As with charges, most QuickBooks users wait until statements arrive to enter credits.

To enter the credit to Office Depot that appears above, open the Enter Credit Card Charges window:

Enter information for a credit the same as if you were entering a charge, but be sure that the Refund/Credit option is selected near the top. You’ll also want to verify the account charged if it doesn’t appear by default. This can be done by going to the Credit card register and looking up the original charge.

 

Remember: Regular credit card payments are not entered with this form.

II. Credit Card Entries Using the Summary Method:

With the summary method, credit card payments are lumped together and entered as a batch in QuickBooks. Using an Excel spreadsheet to total charged by QuickBooks account can be useful when using this method.

From the Credit Card Statement, Summarize the charges by account in Excel:

 

The totals are the amounts that you will enter into QuickBooks. Open the Enter Credit Cards window, and enter the totals from your Excel worksheet:

To facilitate reconciliation, it is not recommended that you use summary entries for credits/refunds. Also, as cited before, if you want accurate job costing, or track reimbursable expenses, you should use the detail entry method.

III. Reconciling the Account

After completing your data entry, the account is ready for reconciliation. Go to Banking … Reconcile (it may indicate “Reconcile Credit Card.”)

This opens the Reconciliation window:

There are several things to verify and enter before you continue with reconciliation. These are:

  1. Select the Account you’re reconciling
  2. Verify the last reconciliation date (this should be the last statement closing date)
  3. Enter the current statement date that you are reconciling
  4. Verify the beginning balance. This appears on your current statement
  5. Enter the ending balance of your current statement
  6. Enter the finance charges on your current statement (may include both interest and transaction fees)
  7. Enter the date of the finance charges (generally the same as the statement date)
  8. Select the account to be charged for finance charges. Here, we use Bank Service Charges

Now you’re ready to continue with reconciliation. Select (9) Continue, to open the Reconcile Credit Card window:

Mark as cleared (by clicking) the charges, payments, and credits that appear on your statement. When the Difference equals zero, the account is reconciled by clicking Reconcile Now.

If you have trouble getting the Difference to equal zero, check the beginning and ending balances on the statement. If those are correct, one of the entries to QuickBooks is likely the source of the problem. Go though each entry (double check your work if you use the Summary method) to discover the discrepancy.

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