how to pay credit card accounts in QuickBooks Desktop

A credit card allows you to borrow funds for purchases or pay bills. The Process of paying a credit card invoice in QuickBooks Desktop generally depends on whether you’re reconciling your credit card account or paying without reconciling your account. You can set up your credit card account in QuickBooks Desktop to help you keep track of the charges and payments you make. In this post, you will easily learn how to set up, use, and pay credit card accounts in QuickBooks Desktop.

So let’s move your cursor till the end

• Positive Balance:
  There are pending charges on your credit card.
• Negative Balance:
  The amount you paid is more than your due balance. 
• Zero Balance:
  You did not make any charges or you already paid your balance due. 
• Credit Card Subaccounts:
  You can enter the charges and payments in the subaccount and it will display on the account register. The total amount of these charges and payments should be equal to the total balance for the parent account.

The process to set up, use, and pay credit card accounts in QuickBooks Desktop

1. Set up credit card accounts

You are required to set up credit card accounts first to pay with ease. Here’s how: 

• From the Company File menu, you have to select the Chart of Accounts.
• Next, click on Account or the Plus + icon and then tap on New. 
• Choose Credit Card and press the Continue button.
• Afterward, enter the credit card name on the Add New Account window.

Note: If you are setting up a sub account, select the Sub account of the checkbox then choose the parent account from the drop down menu.

• Tap on entering Opening Balance and later enter the balance or date of your account. 
• At last, hit Save & Close.

2. Enter Credit Card Charges

To put the amount you owe in the credit card account, you need to enter the credit card charges. 

• To start off, select Enter Credit Card Charges from the Banking menu. 
• From the Credit Card drop-down menu, you must choose the Credit Card account. 
• Purchase/Charge is the default. If you want to record a credit card or refund you received through the credit card, now tap on the Refund/Credit instead. 
• Under the Purchased dropdown menu, you need to select the vendor. 
• After this, choose the correct date. 
• Then, enter a memo explaining the charge or refund (optional). 
• Once you are done with this, press the Expenses or Items tab and type the Expenses/Items you want to track. 
• The final step is to tap on Save & Close. 

Pay Credit Card Charges

It’s necessary to pay credit charges to reduce the amount you owe.

Pay Credit Card invoice while reconciling credit card account

Credit Card Reconciliation is the process to ensure that the transactions made with credit cards match with the transactions showing up in your general ledger. Reconciling your credit card account before you pay your credit card invoice is a good practice because it allows you to catch potential errors made by your vendor or your credit card company easily. Reconciling your credit card transactions also helps reduce the possibility of fraud in your company.

Like most account reconciliation processes, it’s how to verify that the transactions on both sides are complete, correct and valid. Reconciliation is an essential part of the closing process where the integrity of your records is ensured. The process of paying credit card invoices during the reconciliation of a credit card account can be accomplished in two simple steps:

• Reconcile your credit card account.
• Make a payment or enter a bill to pay later.

Reconcile your Credit Card Account

• All you need to reconcile your credit card account first of all if you’re not familiar with the process, how reconciling a credit card balance in QuickBooks Desktop. 
• Once you have successfully cleared your transactions, press the Reconcile Now button on the lower left side of the reconciliation screen. 
• After clicking Reconcile Now, a small pop-up screen will appear asking how you want to make your payment. 
• You can press the Write a check for payment now button or enter a bill for payment later. 
• Now, choose your desired payment option and hit the OK tab. This is where the payment process starts.

A. Write a Check for Payment Now

The Write a Check for Payment Now button leads you to the Write Check screen. From the Write Check screen, make sure to enter the required information including as follows:

• Bank Account: Select the bank account where you want to pay the amount. 
• Print Later: Check this box if you want to create the check now but wish to print it later.
• Pay to the Order of: Enter the name of the vendor. This will be generated automatically by QuickBooks Desktop.
• No.: If you wish to print the check now, ensure that you enter the correct number from the check you‘ll place in the printer. 
• Date: Enter the date when you’re issuing the check. 
• Amount: Write down your desired amount. You can enter a portion or the total amount due. 
• Address: This field is generated automatically based on the payee information you entered in QuickBooks Desktop. 
• Memo (Optional): Enter additional information like the purpose of the payment. 
• Expenses or Items tab: QuickBooks will record this payment in your credit card liability account automatically as shown in the Expenses tab. 

B. Enter a Bill to pay Later

Now, let’s go to the other option which is to enter a bill for payment later. When you hit the Enter a Bill for Payment Later tab, you should see the Enter a Bill screen.

From here, you need to populate several fields, including the following: 

• Vendor: Enter the vendor for whom you’re paying the bill. 
• Address: This field is automatically populated based on the information you entered during vendor setup. 
• Date: Enter the date of the credit card statement. 
• Ref. No (optional): Assign a unique number to your bill.
• Amount Due: Enter the total amount of the credit card bill that you wish to pay this month. 
• Bill Due: Enter the due date of the bill. 
• Terms (Optional): This is generally not applicable to a credit card bill. 
• Memo (Optional): Enter additional information, such as “Bill for October Credit Card Payment”.
• Expenses and Items Tab: As with a check, QuickBooks will record the bill as a reduction in your credit liability. 

Winding up!

The best part about using QuickBooks Credit Card Payments is that if you have an accounting tool for recurring sales, you can choose to turn a sales receipt into a recurring transaction. This means that QBO will automatically create a new sales receipt at whatever interval you set. If you’re not doing recurring sales, you can still store the card. So whenever the customer is ready, they can let you know that it’s OK to receive a payment using the payment method on file. In this case, you’d click on your Quick Create, choose Receive Payment, and enter the appropriate information.