People record credit card expenses from their company credit cards to QuickBooks in all sorts of crazy ways. If you’re using a company credit card (as opposed to a personal card), you need a way to record those credit card transactions in QuickBooks. The correct way to record company-issued credit card expenses is to use the credit card register, but not everyone does that.
Here at ProOnGo, we’re the experts in all things expense. If you’re trying to reimburse an employee for out of pocket expenses, check out this post. If you’re interested in recording expenses incurred on your company’s credit card, this post is for you.
Here are three common ways that people incorrectly record expenses in QuickBooks:
Vendor Bill to Credit Card Company
In this case, you would create a Vendor Bill, with the credit card company (AmEx, Visa, etc) as the Vendor. Then you would fill out all the line items with each individual expense and hope the end result matches your credit card statement. The thought behind this is okay – when you use a credit card, you’re spending the credit card company’s money. That’s why you get a bill from the credit card company rather than from the place you spent money (McDonald’s, Marriott, etc).
This method is, however, inefficient. If you’ve ever spent time keying in transactions, you know that errors are common. So, not only are you spending too much time entering in individual transactions, but if the vendor bill and credit card statement don’t match, you’re also spending time trying to find where on earth you made an error.
Vendor Bill for Each Transaction
This method involves a whole lot of vendor bills; you create a vendor bill for each transaction, with the vendor being the place you spent money (eg Pete’s Puggle Place). Writing a Vendor Bill for each transaction is even more inefficient than creating one big Bill. Say you’re on a business trip, and you spend money in 20 different places. This method would require you to create 20 different Vendor Bills, then Pay Bills for every single one of them. It’s easy for a transaction to get lost or forgotten in all the hullabaloo, and it’s virtually impossible to reconcile these expenses with your credit card statement. It’s a big mess.
Write a Check
People get used to Writing Checks for expenses. It’s a good way to record money coming out of your bank account, and can be used to record debit card transactions, and to reimburse employees for out of pocket expenses. For company credit card transactions, though, this shouldn’t be the case.
The most common thing people do is to write a check to the credit card company whenever they get their credit card statement. They fill out each individual expense as a line item on the check, and then compare that to the credit card statement. This is essentially the same thing as the first example, which was issuing one big vendor bill. So, writing a Check to the credit card company has the same pitfalls of issuing a Vendor Bill to to the credit card company; there’s too much data entry and it’s far too subject for error. Plus, it’s very time consuming.
So, what IS the right way to record your credit card transactions in QuickBooks?
The easiest, fastest, and most accurate way to record credit card transactions is to use online banking. By using online banking, all of your credit card transactions are posted to a specific credit card register, and it’s easy to reconcile these charges at the end of every month. Plus, you can categorize the expenses right in the register by client, class, item, etc. There are no errors, since it’s coming right from the bank, and the information is constantly updated.
Check out this blog post about setting up credit cards in QuickBooks, and then take a peek at ProOnGo’s credit card sync feature, which pushes all of the convenience of online banking in QuickBooks right to your smart phone.
Did you know: When you have online banking set up, you can use ProOnGo to sync with your credit card register, allowing you and your employees to categorize, edit, and add receipt images to your credit card transactions from any smart phone, any where, and at any time. Check out our Credit Card Sync.