are you sometimes challenged with credit card related issues when you're using your QuickBooks
Online well then you should watch this video very clearly I'm going to give you an overview of the
ideas of credit card transactions if you have any questions about this topic you can leave them in
the comment 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 and don't forget to subscribe to get updates on new videos
that come out all the time most people already know certain things about credit cards when using
them and recording transactions and 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 our 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 we also know that credit card companies give you a monthly statement similar to the way the
bank gives a monthly statement so what exactly are the correct procedures for recording credit card
transactions in quickbooks online well first you must enter each individual charge as a separate
transaction in quickbooks online you must use the expense window to record individual charges and
use the specific windows that quickbooks online has created especially for credit card payments
and credit card credits you must reconcile a credit card account in quickbooks online the same
exact way that you would reconcile a bank account again it's the exact same thing do not wait until
the end of the month and enter the charges from the statements because that's like asking the
Fox to guard the henhouse it's like asking the elephant to protect the peanuts it's like asking
the crack addict to guard the medicine-cabinet I think you get the point in other words you
are the bookkeeper you must protect our company from false or mistaken charges and the only way
to do that is to enter every individual charge from the slips that you get when you charge and
then compare them and reconcile them with the monthly statement that comes from the credit
card company another thing you should not do is record all credit card charges into one expense
like credit card expense or something like that no you cannot you must enter the individual charges
to the actual expense that you're charging if you're charging for a delivery you have to record
it as the live expense if you're charging to buy supplies you have to record it as supplies etc you
should also not pay the credit card bill from the checks window and list each charge as a separate
expense you cannot do that you must you must use the specific designated windows that QuickBooks
Online provides for entering a credit card credit and entering a credit card payment and the last
thing that you should not do is use the enter bills feature to enter the statement or anything
that relates to the credit cards in the accounts payable section the accounts payable section is a
separate section from managing your credit cards let's add Capital One credit card to the chart of
accounts we know it's going to be a credit card type of account and then we're also going to add
the name Capital One to the vendor list because even though a credit card company is not a vendor
we still have to pay them so we put them on the vendor list because they are a payee let's take a
look at how to add these two things so first we'll add the account in the chart of accounts just like
we learned in the left panel we click accounting chart of accounts now that we're at the chart of
accounts window we click new and obviously the type is credit card type of transaction
now with credit card there is no detail type but the name should be capital one credit card
then click save and close we now have an account in the chart of accounts to be able to record our
credit card transactions now let's add their name to the vendor list so that when we make a payment
we have something to put in the payee field you can click expenses and then go to vendors and
then click new vendor and even though Capital One is not a technically a vendor we will still
put their name and information on the list so that we're able to pay them as a payee and we're
finished we are now set up and prepared to record credit card charges credits and payments you