CMS TECH TIP
Bank Reconciliation Module
Paying vendors by credit card

Bank Reconciliation Module for the Reporting to the MAX
by Cary Welsh, Director of Training & Design

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.

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