would you like to be able to use quickbooks online to manage your credit card transactions well don't
worry this video will show you how to manage your personal credit cards using quickbooks online
if you have any questions about this topic you can leave them in the comments section below and i'll
do my best to help you and of course if you feel the video helped you i hope you will click like
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already know certain things about credit cards when using them and recording transactions in
quickbooks online first you must have an account in the chart of accounts
to record all transactions with credit cards secondly keeping records of a credit card account
believe it or not is exactly the same as keeping records of a bank account
the money gets paid to the financial institution and you pay from the account for business expenses
let's think about that for a moment how exactly are credit cards and bank accounts the same well
with a credit card you would pay from the account for business expenses and you would do that first
then after you charge the card you would pay your money to the financial institution for the charges
a bank account is exactly the same but in a bank account first you would pay the financial
institution your own money for the future charges to the account that you will have
and then you will pay from the bank account for business expenses but keeping records
of these two separate things are exactly the same they're the same transactions
happening in a slightly different order but in quickbooks online recording credit card
transactions in the credit card register is physically exactly the same thing as recording
transactions in the bank register the way we have been doing for this course and of course
the accumulated results get totaled and displayed in the trial balance in the exact same way
so for credit card transactions when you charge the credit card
the balance of that specific card will go up and of course whatever expense you paid on the card
will also increase by the amount of the charge and of course if you pay down the credit card or get a
partial refund those would be the two transactions that would make the credit card balance go down
for example let's imagine on march 1 we charge to ups for a delivery with
the citibank credit card eight hundred dollars now if this is the way the trial balance looks
before we record that charge what will be the result after the charge well if we charge eight
hundred dollars to citibank credit card then the citibank credit card will show
up for the first time as eight hundred dollars and if the reason we charge the card was for
delivery that means that delivery expense will show up for the first time in the trial balance
as eight hundred dollars so how do we record it well we click accounting chart of accounts
and we find the register of the specific credit card that we're making the charge for
in this case it's citibank credit card and we click view register now we can record
a credit card expense or a bill payment or a transfer in this case this is a an expense
it's a charge a charge is a normal expense on the credit card and it was ups who did the delivery
and the reason we needed to have ups deliver is because we needed to incur
this delivery expense and the date that we got the delivery in this example
was march 1 and the money amount was a charge that we put in the charge field
eight hundred dollars push tab to save the field
now we can save this transaction by scrolling to the right
by scrolling to the right we click save now when we click reports trial balance
you can see that delivery expense showed up for the first time as eight hundred dollars
and citibank credit card also showed up as eight hundred dollars
let's do a second example let's imagine on march 5th we charge to dr kirk for vet bills with the
citibank credit card a hundred dollars what will be the result of this charge well we owe a hundred
dollars more to the citibank credit card so that balance will increase and become nine hundred
and of course if we have a hundred dollars more in vet bill's expense that bill's expense
increases and becomes 250 dollars so how do we record this we click accounting chart of
accounts and we scroll to the citibank credit card then go across the row and click view register
now you can click add credit card expense and then because that's what a normal charge is and go
forward to march 5th now we know we charged it to dr kirk he's the merchant whom we paid
and we know that the reason we paid was vet bill's expense and we click in the charge field
type in the amount of the charge and push the tab key just to save the field then we scroll
across and click save for the whole transaction and now when we click reports trial balance
you can see that citibank credit card increased to nine hundred dollars exactly as it should
and vet bills deep uh also increased to two hundred and fifty dollars
now what about payments and credits well when you get a credit because somebody gives a partial
refund or if you pay down the credit card a little both of these make the balance of the credit card
decrease and you will simply record them in the other column of the register whether it's
a payment to the card or whether it's a credit for a partial refund for example let's imagine
on march 10 dr kirk refunded fifty dollars to us from our last vet visit it was credited back
to the citibank credit card well what will be the result the balance of citibank credit card will
decrease by fifty dollars and that bill's expense will also decrease the vet bills will decrease by
fifty dollars and become two hundred and of course because you just got a fifty dollar credit the
nine hundred dollar citibank credit balance will become eight fifty how do we record this very
simple we click accounting chart of accounts we go to the citibank register and click view register
now this is specifically this type of transaction is a credit card credit and you must from the
pull down choose the correct type of credit card transaction oop we put the date first march 10th
and again it was dr kirk and again dr kirk is always
that bill's expense and the amount now notice it's not really a payment
it's really a partial refund but even though we're not paying dr kirk dr kirk's not paying us
but we have a credit which is the same effect as a payment so we're going to put in
the 50 credit and push the tab key now we're going to the right and click save
now let's check the result we go to reports trial balance and you can see the balance
on city card is now eight fifty and you can see in vet bills it's now two hundred dollars
now our last example is an example of paying down the credit card
let's imagine on march 20 we paid citibank credit card 300 to decrease the balance
and we paid it with check number 61 from chase bank so what's going to change well we know the
balance of chase bank is going to decrease by 300 because we just gave 300 from the chase bank
so when we finish chase banks balance will be two thousand five hundred fifty and of course the
citibank credit card balance will also decrease by three hundred because we just paid it down and 850
becomes 550 after we record this transaction so let's take a look we click accounting
chart of accounts again it's still the citibank credit card that we're paying from
view register now i believe the date said march 20 correct so we're going to put in the register
uh ad credit card credit not bill payment bill payment is something different a credit card
credit is both a partial refund that the credit card gives you as well as making a payment when
you are using the register window so we click credit card credit and of course who is uh who
are we paying we are actually paying now get this we're paying the credit card company citibank and
even though citibank is a financial institution and not a vendor we still must click add new to
add it to the vendors list even though they're not the same type of vendor we would normally use
and because we have to pay them their name has to be on the vendors list
save and we paid citibank but the account in the chart of accounts that we paid
is the citibank credit card in the account field in the chart of accounts
oh excuse me you don't do this that's wrong you see because here's why
we are already in see i'm glad i showed you what was wrong because look at this we are already
in the citibank credit card register so the money that's paying down the citibank register is coming
from the chase bank account so we are lowering the citibank register because we're paying from
chase bank and if if we were recording this instead in the chase register then the citibank
would be down here it would just be the opposite it's the same idea both registers are affected
three hundred dollar payment okay hit enter maybe scroll down maybe scroll to the right save
and now that we saved it we can click reports trial balance and you can see the balance of the
credit card decreased to what we expected 550 and the balance of the chase bank account decreased
to exactly what we predicted a moment ago 2550 another similarity between bank transactions
and credit card transactions in quickbooks online is that you can use other windows besides
the register window to record your credit card transactions for example you can also enter credit
card charges in the expenses window watch if you come here and click new and you choose expense
you can do this you can make the payment account the credit card account that you're paying from
and all the other fields of data are the same the payee the category of expense that you're paying
the description the date and the amount will all be filled in exactly the way you did a moment ago
when you recorded a credit card charge in the appropriate register for citibank you
should also know that you can also enter credit card credits and payments in the other window
enter credit card credits so in other words if we close this out leave without saving yes
click new you can see there is a special window for credit card credits and payments and if you
click you can see that the only account types that you can choose in this window to pay down
the credit card or show some kind of refund or decrease in the balance is right here in this
window credit card credit you choose the correct card then all you do is put in the same fields of
data that we put in a moment ago in the register when we recorded our credit and we recorded our
credit card payment and the result will be the same but why do you need to know this you need
to know this in case you have to use the trial balance to reopen a transaction that is a problem
for example if we look at vet bills and we double click you can see that some of the vet bills
were paid from the m t bank account but you can see that this fed bill was this third one down
which was on march 5th was actually paid from the citibank credit card for a hundred dollars
and then you can see the fifty dollar credit card credit listed here for what dr kerr gave us and
if you need to reopen a transaction even though we recorded this hundred dollars in the register
if we need to reopen it from here to fix it we double click it's not going to show that
transaction in the register where we recorded it it will instead show it here in this window
and we can change whatever we need and then save it and the results will change accordingly you