If you have a customer who wants to know how
to pay their vendors in Accounts Payable with a
credit card instead of by check, Bank
Reconciliation is the module that will assist
you with reconciling your credit card statement
each month.
Set Up a Credit Card Bank Account
First, start Bank Reconciliation and set up a
new bank account with the Account Type of Credit
Card. Enter the liability account representing
your unpaid credit card balance in the Bank
Credit Card account field. On the General tab
check the "Suppress AP Checks" check box. Then
save the bank account code.
Paying the AP Bill with a Credit Card
When paying the bill in AP Pay Bills or as an
Immediate Check in AP Enter Bills, enter the
credit card bank account in the BR Bank Code
field. At posting, AP will be debited (this will
be the expense account if this is an Immediate
check) and the liability account set up in the
credit card bank account will be credited. Since
the Suppress AP Checks feature is turned on for
the Credit Card Bank Account you will not be
prompted to print a check for the credit card
payments, however you will need to enter a
tracking number such as a receipt or invoice
number in the check number field for posting to
take place.
Note: you can also enter any non-vendor payments
using the Paid Out feature in Accounts Payable
to track one time purchases from non-established
vendors.
Paying the Credit Card Bill
Open BR. From the Enter Activity menu, select
Enter Bank Activity and choose the bank account
you use to pay the credit card bill in the Bank
Account field. Choose Check for the Activity
Type and fill in the rest of the fields. Make
sure to enter Cash on Hand in the Expense
account field in the bottom grid. This will
debit Cash on Hand and credit the Cash account
set up in the regular bank account. Print the
check and then go back into the Enter Activity
menu. Select Enter Bank Activity and choose the
credit card bank account. Choose Deposit for the
Activity Type and fill in the rest of the
fields. Make sure to enter Cash on Hand in the
Opposing Account field in the grid at the
bottom. This will debit the credit card
liability account and credit Cash on Hand. Then
post both transactions to the General ledger.
When all is said and done, the credit card
bank account is reduced by the amount of the
payment. The balance showing at any given time
on the credit card bank account is the amount
owed to the credit card company. You can use the
regular bank reconciliation process to clear
purchases and payments out of the credit card
bank account and match it to your monthly credit
card statement.
