CREDIT CARD VIA LEDGER (PAYMENTS)

This setup assumes that you do NOT have the Payables Multiple Bank Account Option.

This method will keep separate your credit card payables and your regular accounts payable. A credit card is technically a loan that can accrue interest, and should be tracked as such.

Use the General Ledger to enter Credit Card expenses and pay the credit card company using the checkbook.

1. Go to Ledger > Account Categories
2. Insert a Credit Card LIABILITY Account in the 2000 series. You may want to start all your short term loan accounts with 21xx. For example, set up a VISA account as 2110, a Mastercard Account 2120, etc.

3. When making a purchase using a Credit Card, go to Ledger > Enter Transactions. Insert a CREDIT against the 2xxx Credit Card Account, and a DEBIT against the Expense Account for the items purchased. The Post date should be the date of the purchase. This entry could also be done once a month off of the the Credit Card statement. Any interest charges will DEBIT against the Interest Expense account (6000 series).

4. When writing a check to pay the credit card, go to Checks, and Insert a check for the payment amount. The offset account will be the 2xxx credit card account.

This technique will allow you print a detail history of the credit card account, and also track the credit card balance on your financial statements. It provides a clean and simple audit trail. The limitation of this method is that the Payables Reports will not show the balance due on the Credit Cards, and you will not maintain a detailed vendor history of purchases.

See User Guide #171 and #291 for alternate methods using the Payables Module.