It is significant to find out how to reconcile a credit card in QuickBooks when you run a company. You can have multiple employees. For recording the payments of these, completing this process is an initial requirement. Even when you are not necessarily an employer, you can do the reconciliation for your own credit card as well.
The process can be done for a credit card account or partial payments. For one or multiple credit cards too, you can attempt the reconciliation process. In QuickBooks Online and Desktop, you can find several options like Chart of Accounts, Banking, etc., that make it easier to match the transactions related to these. To choose one method specifically, you should first find your reason for reconciliation and then move ahead.
- Why do You have to Reconcile Credit Cards in QuickBooks?
- Reconciliation of QuickBooks Desktop Account
- How to Reconcile a Credit Card in QuickBooks?
- How to Reconcile Multiple Credit Cards in QuickBooks Online?
Why do You have to Reconcile Credit Cards in QuickBooks?
For several reasons, you may want to add the payments of your credit card in the software. Prior to doing this, you need to reconcile a credit card in QuickBooks. This can prevent errors when you record the payments/transactions.
The following are the errors for which prevention is available through the process:
- Your transactions will not be missing.
- In the reconciliation process, you will identify wrong values. You can remove them to maintain correct entries.
- The process enables you to erase duplicate entries of transactions.
Reconciliation of QuickBooks Desktop Account
In QuickBooks Desktop, to reconcile credit card accounts, you can visit its Banking option. This runs a menu with a Reconcile feature. In it, you can add an account and specify the credit card for it. Certain information like Statement Date will be filled in by the accounting software itself. You can manually add the other details. Later, you can check the balance for the statements to complete the account’s reconciliation.
- Step 1 is to see the “Banking” option.
- Now, you can move to “Reconcile” given in it.
- Press “Account”.
- Choose an account from “Credit Cards”.
- Wait for “Statement Date” to auto-fill.
Note: This date can be the one observed after 31/30 days from that of the last reconciliation.
- You can modify the statement of your bank, should you need to.
- Pause for a while and let QuickBooks Desktop add your “Beginning Balance”.
- View “Ending Balance”. Here, input the same value as the one on this bank statement.
- Go to “Service Charge and Interest Earned”. Here, mention the charge for service and interest. Enter them only when you did not include them in any balance earlier.
- Check the information in all these fields. Then press “Continue”.
A process for reconciliation will start for the credit card account. You will have to mark certain fields. Then you can tap on the button for Reconcile Now.
Note: It is important to learn that partial payments can be the same as the full ones. The difference can be in the amount. So, in QuickBooks, to reconcile credit card partial payments, you can use the same method. This is to say that you can do the process for the account and include the data of these payments.
How to Reconcile a Credit Card in QuickBooks?
Accounting is the significant menu you need to use for launching the QuickBooks reconcile credit card method. In the Desktop version, the process begins via the Chart of Accounts. Though both methods are different in steps, they require information such as the ending date, ending balance, etc., in common. The correctness of the information helps you complete the reconciliation methods with success.
Method 1: In QuickBooks
A user of QB can aim at his or her credit card’s reconciliation by including an account for it. This is done via the Accounting option. Since you are adding it to reconcile the credit card in QuickBooks, you have to first choose the Reconcile option. Following this, in a particular screen dedicated to the process, you can add your account. After this, you can use the Start Reconciling feature.
- Select “Accounting” after you enter the QB software.
- Hit the “Reconcile” option.
- View the screen for reconciliation.
- Choose “Account”. Here, add an account for your card.
- In “Last Statement Ending Date”, ensure that you can see a date that is auto-entered by QuickBooks.
- Verify your credit card’s beginning balance as given on this screen.
- Using the card’s statement, key in “Ending Balance”.
- Add “Finance Charge”. Please record it only when you have not done so in the earlier steps in the form of any other balance/value.
- Tap on “Start Reconciling”.
- A reconciliation summary should appear. Check the following in it for transaction matching:
- “Cleared Balance”
- “Statement Ending Balance”
- Ensure that between the cleared and ending balance, the arising difference is zero or 0.
- For every transaction, press the radial symbol. The entry will be recorded as “Cleared Transaction”.
Tip: You may find a repetitive transaction. The account may be wrong. Or, any dates included in the process may be incorrect. Please take suitable actions for correct reconciliation.
Once the difference turns out to be zero, the process need not be done any further. As an optional direction, you may try entering a new payment on the balance of your credit card.
Method 2: For QuickBooks Desktop
For the card’s reconciliation, you can find a specific option called Reconcile Credit Card. Its location is in the Chart of Accounts of QBDT. Thus, to understand how to reconcile credit cards in QuickBooks Desktop, this is the option you have to access. It will ask you for details inclusive of Ending Balance, Finance Charges, and the like to start the method.
- Run “Chart of Accounts” or “COA” in QuickBooks Desktop.
- Decide which credit card account needs reconciliation.
- Press the option of “Activities”.
- From the menu you have, choose “Reconcile Credit Card”.
- A box will emerge for starting the process to reconcile. You have to add the date of the card’s statement to it.
- Using the statement, you have to mention your card’s “Ending Balance”.
- Add the finance cost or charges. Along with this information, also enter the date of receiving.
- Provide the account for which this charge has been applied.
- Hit “Continue” for going ahead.
- The user will find a window for reconciling his/her credit card. Uncleared transactions need to be checked off.
- Tick all the transactions that match the ones of the card. By doing so, you will be marking them as cleared.
- Confirm that the difference of the matched entries is “0”.
- Tap on “Reconcile”.
- Choose whether you require a report for the reconciling process afterward.
- You will be taken to the “Write Checks” screen. Alternatively, as per the amount, you may be directed to the window for entering bills.
Note: For the check or bill, the charge will already be applied to your account. Thus, the amount for the same will also be included.
- Pick one company to whom the balance of this card is to be paid.
- Proceed with the printing or your check. In case of a bill, please save it.
How to Reconcile Multiple Credit Cards in QuickBooks Online?
Usually, company owners may want to do the reconciliation of multiple credit cards belonging to their employees. A short method for this is by force reconciliation in which you use the adjustment feature of QBO.
You can also reconcile credit cards in QuickBooks Online when they are so many by using a parent account. Here, the process gets divided into 2 other ways. Either you can do this in combination with a sub-account or reconcile all the cards into the main parent account for the credit card.
Method 1: By Force Reconciliation
Reconciliation by force is a way in which you require limited information. It can be convenient when you have multiple credit cards. Entering the details for all of these can be done away with through this method. You can initiate it from QuickBooks Online’s settings. Eventually, keep in mind that the Add to Adjustment feature has to be used.
These directions further reveal the method for reconciling credit cards in QuickBooks Online:
- Use the “Gear” or “Settings” button.
- View the section for “Tools”.
- Now, you have to tap the “Reconciliation” tab.
- Press “Account”.
- Include the following details in the allocated spaces:
- “Ending Date”
- “Ending Balance”
- Going ahead, please choose “Start Reconciling”.
- Save this method and then press “Finish”.
- “Add to Adjustment” needs to be clicked on.
Method 2: Using Parent and Sub-accounts
You can add a parent account in QBO. This is mainly for the credit card to which reconciliation will be done. Then you can also create sub-accounts. These will be useful for the credit cards that you would like to reconcile.
For a user of QuickBooks Online to reconcile credit cards in multiple numbers through these accounts, both Banking and Transaction menu are available. With any one of these, you can do the method.
- Initially, you will make one bank account. This will be the parent account. Afterward, sub-accounts will be added. Choose one of these in QBO:
- Press the option that says “Connect”.
- Push the button called “Add Account”. Use it only when you have not made the account prior to this.
- Once you find your bank, you have to hit “Continue”.
- A username needs to be added. Also, include a password. It should be the same as the one you use for your bank’s site.
- Specify what type of account this is.
- Your transactions have to be downloaded. For this, please enter “Date Range”.
Note: Certain banks enable the users to have the transactions downloaded for the past 90-day period. With other banks, this range can extend to 24 months.
- Select “Connect”.
Note: Avoid downloading the entries to one account. Or else, you can connect it to your parent account. Afterward, you can reconcile multiple credit cards.
You need to assure that the card’s opening balance is not incorrect. Otherwise, you may remove it and then go for reconciling the information.
- Click on the option of “Accounting”.
- “Chart of Accounts” is to be chosen.
- You have to choose one account and then press “Register”.
- Via “Edit”, delete the faulty opening balance.
- Tap on Save”.
Now, it is essential to do the reconciliation of the parent card account in QBO. Later, the transactions will move to your sub-accounts.
Method 3: Reconciling to a Parent Account
When you decide to use only one parent account for reconciliation in QuickBooks Online, you have to first transfer every employee’s credit card’s balance to it. Then for all your employees, you need to do the reconciling process. Explaining further how to reconcile credit cards in QuickBooks Online, you have to focus only on the parent credit card. Now, reconcile its account and print a report at the end.
- The balances of the credit cards of your employees are to be transferred to a parent card. Press “+New”.
- Opt for “Transfer”. Possibly, it should be given below “Other”.
- Via the screen for “Transfer”, tap on the parent account for the credit card. Type it in “Transfer Funds from”.
- View the field called “Transfer Funds to”. Here, the card account of your employee should be written.
- The amount of the transfer has to be provided.
Note: This amount is the same as the ending balance of the employee’s card. It will also be available on the statement.
- Correctly write the date for the closing of this statement.
- Create a memo in QuickBooks Online. It should mention:
- “Card # Credit Card for Close Date and Balance Transfer to Parent Credit Card Account.”
- This statement’s copy can be attached, when required.
- Once you check the information, opt for “Save and New”. Now, add the account balance for the cards for all your employees.
- Push “Save and Close”.
Start reconciling the card account of each employee.
- For this, see where the QuickBooks “Gear” icon is.
- Tap on “Reconcile”.
- In a new window for reconciliation, choose the account for his/her card.
- Input “0” for “Ending Balance”.
- Use “Ending Date” for the date of statement closing.
- Select the option of “Start Reconciling”.
- In this window, you have to use the visible transactions to compare those of the card.
- Mark every transaction which has been cleared. Any duplicate entries of transactions in an account need to be resolved as per your requirements.
- Verify whether “Zero” is the difference.
- Push the tab for “Finish”.
- On exiting the window, you can print the report for reconciliation.
- For all your employees, you have to perform these steps again.
Finally, do the reconciliation of your account for the parent credit card.
- Go to “Ending Balance”. Record the balance for the statement closing for this card and add it in this space.
- Move to “Ending Date”. Here, mention “Statement Closing Date”.
- “Start Reconciling” has to be pressed.
- You will have certain transactions in the statement of your card. Using the ones in the “Reconciliation” screen, compare both.
- The cleared transactions need to be marked.
- Do away with any repeated transaction.
- See to it that after the comparison, “0” is displayed as the difference.
- Select “Finish”.
- Hit the “Done” option.
- Check your account’s history. It will help you obtain a reconciliation report. Print it.
In the end, you have to start a report for the balance sheet in QuickBooks Online. Ensure that the report is for the period relating to the statement. After this, 0 will be the balance of your employees’ accounts. The main statement balance will be shown in the parent card’s account. This is the balance to be paid for the card.
Since reconciliation helps you reduce errors relating to entries, statements, or transactions of credit cards, the process is important. Whether you are a professional or an employer, the accounting software enables you to reconcile a single or multiple cards. Based on the purpose, you can pick a suitable process and securely attempt it. Later, payments can be added to the card without any errors made.