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Evo-ERP and DBA Classic >> Suggestions for Updates >> Credit Card Charges
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Message started by Lenette on 11/13/05 at 18:54:15

Title: Credit Card Charges
Post by Lenette on 11/13/05 at 18:54:15

Quote:

That is why I am looking at a more streamlined way to handle credit cards.
~ Lynn Pantic

We've been grouping our monthly charges by GL account number. While in theory this works it doesn't allow for auditing without the bill in hand. (In other words, when you see a charge to "office supplies" for $500 you don't know if it is 500 $1 items or 1 $500 item.) I've thought about entering each charge via AP-B when received by the employee (prior to the bill), however AMEX gives discounts for various vendors (such as Hertz, etc.) so that when you get the bill the actual charge is less than the receipt turned in.

What about having a CC type GL account? Then you could point it to a "charged not invoiced" liability account. Once the bill was received you could reconcile it like you do PO invoices and adjust the price like you do with inventory items.

Maybe you've already come up with something better... I just reviewed our AMEX charges for 2005 and realized that many items were posted to the wrong account. So, I'd really like to eliminate the grouping method.

Title: Re: Credit Card Charges
Post by wildco on 11/14/05 at 11:39:41

What we did is create "Credit Card Charges" as a bank account. Then, each charge is entered in GL-B as a cash disbursement, and the description field is used as the vendor.

When the credit card bill comes, we reconcile the bill using reconcile checking account and pay it.

This also has the increased advantage of maintaining a liability account on the balance sheet for all those charges.

Title: Re: Credit Card Charges
Post by Lenette on 11/14/05 at 12:12:44

How do you account for discounts given? (example: 5% open savings for Hertz, etc. Some discounts make the statement cycle date and some show up the following month. Do you process a CR or do you show it as a "discount given"?)

Title: Re: Credit Card Charges
Post by wildco on 11/17/05 at 08:20:04

We just do a CR entry for the discount once the bill comes and apply it to the same account as the original charge.

Title: Re: Credit Card Charges
Post by Lenette on 11/17/05 at 09:55:48

Ok, maybe it's that winter has appeared here in Montana and my brain is a little frozen, but I'm still not sure if I fully understand how you're processing CCs. Is this right? Am I making it to complicated??

1. AM-C Set up GL liability account # 2075 "Amex Charges Not Invoiced".
2. AD-B Add "American Express CC" account using GL account # 2075.
3. GL-B Enter charges as CD type as needed to debit expense & credit # 2075.
4. AP-B Enter voucher for total due on bill, distribution account # 2075.
5. GL-J To reconcile AMEX CC account enter the amount due on the statement as a NEGATIVE amount. Select all processed charges. (The current bill amount is selected when received by AMEX.)

Thanks for your help!!

Title: Re: Credit Card Charges
Post by Lynn Pantic on 11/17/05 at 10:15:47

Step 3 can also be done in AP-B as Manual Check or AP-C as COD if you are paying a vendor and perhaps there is a PO involved. In either case, select the CC as the "Bank Account" to pay the vendor.

Title: Re: Credit Card Charges
Post by wildco on 11/17/05 at 10:18:21

Yes, that is exactly what we do. For PO invoices, we enter them as a COD invoice and select Credit Card charges as the account as Lynn mentioned.

Once it is set up it is not nearly so cumbersome :D

Title: Re: Credit Card Charges
Post by Lenette on 11/17/05 at 13:13:29

Lynn & wildco - THANKS SO MUCH.

I like the idea of entering charges via AP-B as a Manual Check. And, entering Cash Back credits via GL-B.

However, when entering a manual check it doesn't pick up the "description" it lists the Vendor (in this case AMEX) on the account reconcilation report. I would be nice to be able to override the vendor's name.

On a side note, as the check number I'm going to use the employee number for the employee that made the purchase. At least I can group the charges by card used since I can't see the merchant's name.

Title: Re: Credit Card Charges
Post by David Waldmann on 11/21/05 at 12:11:14

wildco wrote:

Yes, that is exactly what we do.

Just curious - do you set up each payee as a vendor? Seems it would be very difficult. OTOH, if you just use the CC Vendor, how do you come up with Invoice numbers? I'd like to go this route but would rather learn from other people's mistakes - I make enough already ;D

Title: Re: Credit Card Charges
Post by Lenette on 11/21/05 at 14:14:34

I use the CC Vendor in AP-B (manual check) for entering charges. I will enter the bill amount offseting to the liability account which (in theory) will make the CC account ZERO.

As for "invoice number"... I have standardized throughout the company... (especially all AP-B voucher entries), if you don't have an invoice number enter the invoice date in this manner YY-MMDD. If you have more than one for a specific date then add "-1", "-2", etc after the date format (05-1121-1, 05-1121-2, & so forth.)

This way for those non-invoice number vendors the previous charges will appear in date order when you F2 the invoice field.

Title: Re: Credit Card Charges
Post by David Waldmann on 11/22/05 at 04:32:04

I'll ruminate on that thought. I don't care for the idea of having to look up to see how many others are on the same day. I think I'll consider using the first letter(s) of the vendor name as a suffix instead of the number of invoices from that day. If I don't put a dash in between the date and the suffix there's still room to add a numerical suffix to the vendor "code".

Title: Re: Credit Card Charges
Post by David Waldmann on 03/08/06 at 05:25:08

Lenette wrote:

5. GL-J To reconcile AMEX CC account enter the amount due on the statement as a NEGATIVE amount. Select all processed charges. (The current bill amount is selected when received by AMEX.)

The problem I am having is that the payment is not showing up on the CC bank account, so when I'm done reconciling, the balance is off by the amount of the payment. Since we pay our CC bill online and don't use a physical check, how would using GL-K and "Transfering" the funds work? That should make an entry to BKGLCHK for both bank accounts, right? Any other ideas?

Title: Re: Credit Card Charges
Post by Lynn Pantic on 03/08/06 at 09:43:37

Yes, that should work and GL-K now has the same kind of Notes capability as GL-B so you can also enter description.

Title: Re: Credit Card Charges
Post by David Waldmann on 04/24/06 at 11:32:43

Maybe I'm just dense, but I think I finally have a working formula. In case anyone else has as much trouble as me I thought I'd add my final twist:

"Reconciling" the CC account twice. When you get the statement, enter an ending balance of 0.00. After all the items are tagged, the "Difference to balance" should equal the amount on your statement. Save to finish later. After the check is written, money transferred, or however you pay your bill (noting situation immediately above), go back in to Reconcile with an ending balance of 0.00, tag the payment and you should be golden.

It seems like you should be able to enter the ending balance when you get the statement, and check off all the items on the statement (including LAST month's payment) and have it work out, but I can't seem to do it and have the "Difference to balance" come out to 0.00 when I'm done.