Accounting for credit card payment of suppliers
Hi everyone,
We have a few suppliers which we pay by credit card. Could someone please advise on the correct way to account for these?
I have created a liability account and named it VISA Credit card.
My current process is as follows:
1) Pay Bills - select my VISA Credit card (liability) in "Pay from Account"
2) Select invoices and click Record.
My confusion comes from when it is time to pay back the credit card, am I able to prepare an electronic payment as an ABA file and treat it the same way as if I were making a bank transfer to a supplier?
Thanks,
Hi Jayce89
There are commonly two parts of credits card transactions; the using of the card and paying it back.
Using the card is pretty simple when you need to record a transaction where the card has been used you would select the Pay from Account to be that Credit Card account. This will typically be set up as a liability and thus you would be crediting that account/increase the account balance.
Paying the credit card off is commonly done through a Banking window like Spend Money where you would have the Pay from account being the bank account that is being used to pay off the card. The allocation account (account selected in the grid) would be that Credit Card account. This would debit the liability (credit card) account and would thus reduce the balance of that account. In terms of the actual paying it off, in theory, you could have a supplier on that transaction and have that set to be paid electronically through the Prepare Electronic Payments - comes done to the bank you are with and if they can payment through that means. Although, commonly you would just do the payment outside of the software (i.e. bank transfer) and then just record the transaction in AccountRight to reflect that.
