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How to Pay Credit Card in QuickBooks

How to Pay Credit Card in QuickBooks

A Credit Card gives you an option to borrow funds for purchases or for paying 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 made. In this post, you will learn how to Pay Credit Cards in QuickBooks with much ease.

So let’s move your cursor till the end. 

  1. Positive Balance:
    There are pending charges on your credit card.
  2. Negative Balance:
    The amount you paid is more than your due balance. 
  3. Zero Balance:
    You did not make any charges or you already paid your balance due. 
  4. 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. You only need to reconcile the parent account. 

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

1. Set up credit card accounts 

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

  1. From the Company File menu, you have to select the Chart of Accounts.
  2. Next, click on Account or the Plus + icon and then tap on New. 
  3. Choose Credit Card and press the Continue button.
  4. 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. 

  1. Tap on entering Opening Balance and later enter the balance or date of your account. 
  2. 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. 

  1. To start off, select Enter Credit Card Charges from the Banking menu. 
  2. From the Credit Card drop-down menu, you must choose the Credit Card account. 
  3. 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. 
  4. Under the Purchased dropdown menu, you need to select the vendor. 
  5. After this, choose the correct date. 
  6. Then, enter a memo explaining the charge or refund (optional). 
  7. Once you are done with this, press the Expenses or Items tab and type the Expenses/Items you want to track. 
  8. 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:

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

1. Reconcile your Credit Card Account

  1. 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. 
  2. Once you have successfully cleared your transactions, press the Reconcile Now button on the lower left side of the reconciliation screen. 
  3. After clicking Reconcile Now, a small pop-up screen will appear asking how you want to make your payment. 
  4. You can press the Write a check for payment now button or enter a bill for payment later. 
  5. Now, choose your desired payment option and hit the OK tab. This is where the payment process actually 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:

  1. Bank Account: Select the bank account where you want to pay the amount. 
  2. Print Later: Check this box if you want to create the check now but wish to print it later.
  3. Pay to the Order of: Enter the name of the vendor. This will be generated automatically by QuickBooks Desktop.
  4. 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. 
  5. Date: Enter the date when you’re issuing the check. 
  6. Amount: Write down your desired amount. You can enter a portion or the total amount due. 
  7. Address: This field is generated automatically based on the payee information you entered in QuickBooks Desktop. 
  8. Memo (Optional): Enter additional information like the purpose of the payment. 
  9. 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: 

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

How to Pay your Credit Card Invoice when you’re Not Reconciling your Account

If you’re not reconciling your account, follow the steps below: 

  1. Write a check.
  2. Print the Check (Optional). 

1. Write a Check

  1. From the Write Checks screen, provide the required information, such as the bank account, pay to the order of (vendor) and amount. 
  2. Click on Save & Close and your credit card invoice is paid.
  3. Be sure to choose your credit card account on the Expenses tab. 

2. Print the Check 

You can choose to print the check now or print it later. Make sure to enter the number of the first check in the starting check number. 

Write down credit card annual and finance charges 

  1. In the beginning, select Chart of Accounts from the Company File menu. 
  2. Now, choose the credit card account. 
  3. From the Payee dropdown, hover over the credit card company. 
  4. Next, enter the amount in the Charge column. 
  5. After this, select the expense account you wish to use for tracking annual, finance and other bank service charges under the Account dropdown menu. 
  6. You need to choose the Tax Code. 
  7. In the end, press Record. 

Steps to pay bills with a credit card 

Here’s how to pay a bill with a credit card: 

  1. The first step is to Select + New.
  2. Under Suppliers click on Pay Bills. 
  3. In the Payment account, choose your credit card account.
  4. Now, enter the Payment date.
  5. Thereafter, select the bill you wish to pay. 
  6. Tap on Save, Save and Print or Save and Close. 

Record your Payments to credit cards in QuickBooks Online 

QuickBooks Online allows you to record credit card payments in multiple ways so that you can keep track of your expenses and maintain accurate financial reports. Let’s see how: 

1. Pay down a Credit Card 

This is the most convenient or easiest way to record your credit card payments in QuickBooks.

  1. To proceed, Select + New.
  2. Under Money Out (if you’re in Business view), or Other (if you’re in Accountant view), choose Pay down credit card. 
  3. Now, click on the Credit Card you made the payment to.
  4.  Enter the payment amount.
  5. Thereafter, write down the date of the payment. 
  6. Opt for the bank account you paid the credit card with. 
  7. Select I made a payment with a cheque if you made a payment with a cheque. In the Cheque no. field, enter the cheque number or if you paid electronically, type the EFT number. 
  8. If you want to add notes or file attachments, click Memo and attachments and follow the instructions on the screen. 
  9. Hit Save and Close. 

2. Some Additional Methods

Do you want to use some other methods to record credit card payments? 

If Yes then here’s the list of them: 

1. Write a cheque:

If you made a credit card payment using a cheque, you can record it in QuickBooks with the help of creating a cheque. 

  1. To start away, Select + New. 
  2. Click Cheque under Suppliers. 
  3. In the Payee field, choose the Suppliers name for the credit card payment. 
  4. Now, you have to select the bank account or credit card from which the payment will be made in the Bank Account field. 
  5. Afterward, enter a mailing address and choose a Payment date. 
  6. In the Cheque no. field, enter the cheque number or if paid electronically, type the EFT. 
  7. Then, make a selection from the Category drop down menu. 
  8. You just need to write down a description and an amount.
  9. Under Memo, enter notes. 
  10. Finally, click on the Save and Close tab. 

2. Create a Bank Transfer:

You can keep a record of a credit card payment through a bank transfer. Perform the steps inclined below: 

  1. To begin with, Select + New. 
  2. Next, click Transfer under Other. 
  3. Under the Transfer Funds in the drop-down menu, choose the bank account the credit card was paid from. 
  4. From the Transfer Funds to the  drop-down menu, click the credit card that the payment went to.
  5. In the Transfer Amount field, you need to type the amount of the payment.
  6. Now, edit the date.
  7. Thereafter, enter notes under Memo.
  8. Tap on Save and Close. 

Make payment after reconciling your credit card

Step 1: Reconcile your credit card transactions 

  1. Navigate to Settings then click Reconcile.
  2. If it’s your first time, tap on Get Started and let’s do it. 
  3. Choose the Credit Card account. 
  4. Now, enter any missing transactions from the statement and adjust any incorrect transactions, if there are any.
  5. Once the difference is zero, select Start reconciling.
  6. In the Reconcile screen, hit the checkbox next to the transactions that match the transactions on your statement to mark it as cleared. 
  7. Hit the Finish now tab and then select Done. 

Do Credit Card Payments in QuickBooks Online 

There are basically two ways to process card payments with your payments account. How you do it depends on if you create invoices in QuickBooks. 

Option 1: Receive a Payment toward an invoice 

If you invoice your customers, you’ll want to receive a payment. This way, you can apply the payment you process to an open invoice. 

  1. Select + New in the first place.
  2. Tap on Receive payment or Receive invoice payment.
  3. Now, fill out the customer info and payment date.
  4. In the Outstanding Transactions section, click an open invoice to apply the payment toward. To take a partial payment, change what;s in the Amount Received field. 
  5. From the payment method drop-down menu, choose Credit Card.
  6. Press Enter credit card details. 
  7. Thereafter, you have to enter the credit card info, or select Swipe Card.
  8. You have to select Use this credit card in the future to save this customer’s credit card. (Optional)
  9. After this, select Process credit card.
  10. Click on Save.
  11. Press Save and close or Save and new. 

Option 2: Create a Sales Receipt 

If you don’t use invoices, You can process a credit card with a sales receipt if you don’t use invoices. 

  1. Start with Select + New.
  2. Now, you have to choose the Sales receipt or make a sale, then fill out the customer info. 
  3. Next, add a product or service to sell. 
  4. From the payment method drop-down menu, select Credit card.
  5. Then, click on Enter credit card details. 
  6. Enter the credit card info or select the Swipe Card.
  7. To save this customer’s credit card, select Use this credit card in the future. 
  8. Tap on Process credit card.
  9. Choose the Save option.
  10. Lastly, hit on the Save and close or Save and new. 

What Happens Next

The Credit Card Payments you received won’t be reflected in your bank account register until the funds are transferred from QuickBooks Payments. Once the funds are in your bank, QuickBooks will record the deposits and related processing fees to the account registers you specified in the QuickBooks Payments options. 

What are the benefits of using a QuickBooks Payments Account?

  1. There’s nothing to install for QuickBooks Payments to work with QuickBooks Online. 
  2. Your accounts and financial statements are always up-to-date since QuickBooks Payments is integrated into QuickBooks. 
  3. Your customers can make payments online by clicking the Pay Now button on their emailed invoices.
  4. You can accept payments using your mobile device via the QuickBooks Online mobile app.
  5. Payments are deposited to your bank account, on average, within two or three business days after the transaction date. 

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.

And if you have the payment information stored, it also charges the card or drafts the bank and emails the customer and you a copy, all at the same magical time.

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.

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