How to Enter and Reconcile Credit Card Charges in QuickBooks Desktop

Before you start

• Set up a Credit Card account in the chart of accounts for the card. Charges add to what you owe, so a positive balance means there are pending charges.
• Using credit card sub accounts under one parent account? Intuit says you can enter charges and payments in each sub account, and you only need to reconcile the parent.
• For reconciling, have the statement's beginning balance, ending balance and end date ready.
• Back up the company file before you reconcile. Intuit lists a backup as the first thing you need.

Step 1: Set up the credit card account

1. 1Go to Company > Chart of Accounts.
2. 2Select Account, or the plus + icon, then New.
3. 3Select Credit Card, then Continue.
4. 4Enter the card's name. For a sub account, check Sub account of and choose the parent account.
5. 5Select Enter Opening Balance and enter the balance and its date.
6. 6Select Save & Close.

Intuit's reconcile article suggests dating the opening balance at the start of a statement. That makes the first reconciliation easier.

Step 2: Enter a credit card charge

1. 1Go to Banking > Enter Credit Card Charges.
2. 2Choose the card in the Credit Card dropdown.
3. 3Leave Purchase/Charge selected.
4. 4Choose the vendor in Purchased From and set the date.
5. 5Optionally, add a memo that explains the charge.
6. 6Enter the lines on the Expenses tab, the Items tab, or both.
7. 7Select Save & Close.

Intuit's job costing article puts items you buy on the Items tab, and freight or postage on the Expenses tab. Buying for a customer job? Choose it in the Customer:Job column on each line. See how to track job costs.

Intuit says a check or credit card charge fits when the vendor expects payment when you receive the goods or services. When the vendor sends a bill and you pay later, enter a bill first. See how to enter and pay bills.

Enter many charges at once (Enterprise and Accountant)

Intuit says only Enterprise and Accountant can batch enter transactions from an Excel or .CSV file into a credit card register. Back up the company file first.

1. 1Go to Accountant > Batch Enter Transactions.
2. 2Choose the Transaction Type and the card Account.
3. 3In your spreadsheet, put the columns in the same order as the Batch Enter Transactions window. Copy the rows.
4. 4Right-click the first date field and select Paste.
5. 5Details in red aren't in QuickBooks yet. Select each one, then Quick Add or Set Up.
6. 6Select Save Transactions, then Yes.

Step 3: Record a refund or credit on the card

1. 1Go to Banking > Enter Credit Card Charges and choose the card.
2. 2Select Refund/Credit.
3. 3Choose the vendor and enter the Date, Ref No and Amount, with a memo.
4. 4For returned items, enter them on the Items tab. Otherwise use the Expenses tab with the right accounts.
5. 5Select Save & Close.

For refunds by check or credits against bills, see how to record vendor credits and refunds.

Step 4: Record annual fees and finance charges

1. 1Go to Company > Chart of Accounts and open the credit card account.
2. 2Choose the card company in the Payee field.
3. 3Enter the amount in the Charge column.
4. 4In Account, choose the expense account you use for annual, finance and other bank service charges.
5. 5Select the Tax Code, then Record.

Step 5: Reconcile the card statement

1. 1Go to Banking > Reconcile.
2. 2In Account, choose the credit card account. With sub accounts, choose the parent.
3. 3Check that the Statement Date matches the statement's end date.
4. 4Check that the Beginning Balance matches the statement's beginning balance.
5. 5Enter the Ending Balance from the statement.
6. 6Enter any Service Charge or Interest Earned that isn't in QuickBooks yet, then select Continue.
7. 7Work through Charges and Cash Advances, then Payments and Credits. Check off each item that's on the statement.
8. 8When the Difference is $0.00, select Reconcile Now.

Select Hide transactions after the statement's end date to see only this period. Leave anything that isn't on the statement unchecked. If you're several months behind, start with the oldest statement and reconcile one at a time.

The Reconcile window is shared with bank accounts. For previous reconciliation reports and undoing a reconciliation, see how to reconcile a bank account.

Step 6: Pay the card balance

After you select Reconcile Now on a credit card account, QuickBooks opens a payment window with three choices:

• Write a check, for an amount you pay now.
• Enter a bill, for an amount you'll pay later.
• Cancel, if you don't want to record a payment yet.

Intuit recommends paying at the end of a reconciliation. You can also pay before you reconcile by writing a check:

1. 1Go to Banking > Write Checks and choose the bank account you're paying from.
2. 2Set the date and choose the card company in Pay to the order of.
3. 3Enter the payment amount.
4. 4On the Expenses tab, choose the credit card account in Account.
5. 5Paying cards set up as sub accounts? Enter one line per sub account. The lines should add up to the amount for the parent account.
6. 6Select Save & Close.

The payment shows in the card register, and you reconcile it with the next statement as usual.

Fix a reconciliation that won't balance

• Intuit lists these causes: a wrong ending balance, a reconciled charge that was edited or deleted, a missing or duplicate entry, or one that hasn't cleared yet. A journal entry that adjusted the last reconciliation can also cause it.
• Run Reports > Banking > Reconciliation Discrepancy for the card account. It lists transactions changed since the last reconciliation.
• Run Reports > Custom Reports > Transaction Detail. On the Display tab, set the Date to field to your last reconciliation date. On the Filters tab, choose the card account and set Entered/Last Modified from that date to today.
• Open the Reconciliation Discrepancies account from the Chart of Accounts to look for past adjustments. Intuit says not to adjust without your accountant's guidance.
• If nothing turns up, Intuit's next step is to undo past reconciliations until the opening balance is right.

Re-reconcile charges that came back uncleared

Reconciled charges can show as uncleared again. Someone may have undone a reconciliation, edited or deleted them, or unchecked them in the register. Restoring a backup can do it too. Intuit's fix is a special, or mini, reconciliation:

1. 1Go to Banking > Reconcile and choose the card account.
2. 2In the Date of Statement field, enter an off-cycle date between your last reconciliation and the next one.
3. 3In Ending Balance, enter the balance of your last successful reconciliation, then select Continue.
4. 4Check off the transactions you're fixing until the Difference is $0.00, then select Reconcile Now.
5. 5When QuickBooks asks how to pay, select Create a Bill to Pay Later. Print the reconciliation report if you want it.
6. 6On the bill that opens, select Clear, then close it. No bill is saved, so the card balance doesn't change.

Delete or correct a charge

To delete a charge, open it, then select Edit > Delete. The batch delete tool in Accountant and Enterprise can't delete credit card transactions, so remove them one at a time.

Editing or deleting a charge you've already reconciled is one of the causes Intuit lists for a reconciliation that won't balance. Before you change one, read how voiding and deleting work in QuickBooks Desktop.

Where QuickBooks Desktop leaves the work to you

• Each charge has to be entered with the right vendor, account and, where it matters, job.
• Batch entry from a spreadsheet is limited to Enterprise and Accountant.
• Someone has to compare every line with the statement each month, card by card.
• Choosing a check, a bill or nothing at the end of a reconciliation is your call.
• Discrepancy reports show what changed. Finding out why, and from whom, is up to you.