Recording credit card transactions enables your organization to track credit card expenses and payments through CommunitySuite's voucher system. This workflow records individual credit card charges as vouchers and then processes the monthly payment to the credit card company, maintaining accurate general ledger records and vendor history.
Create a Credit Card Account
Before beginning the credit card transactions workflow, you must create a credit card account.
- Create a Credit Card Liability General Ledger Account
- This account must have the account type L-Credit Card.
- To check the credit card balance throughout the month, navigate to the Accounts page and click the Account ID of the Credit Card Liability Account.
- This account must have the account type L-Credit Card.
The credit card transactions workflow consists of two parts:
- Record the Expenses
- Record the Payment to the Credit Card Company.
Step 1: Record the Expenses - Individual Voucher Approach
Create vouchers matching the invoices for each charge on the credit card using the Create, Post, and Pay a Voucher article. Creating the voucher establishes a system record of the expense that will show on your income statements.
Use the receipts throughout the month to create a voucher for each transaction paid for by the credit card. The vendor should be the merchant you paid, not the credit card company. Example: Specific vendor of “Mountain Office Supplies Company”, not “American Express”.
Recording expenses to the actual vendors allows complete vendor records of purchases paid by credit cards, checks, or cash. Recording the individual transaction dates and the actual vendors also allows for more robust reporting.
In all cases, complete the following general steps:
Create vouchers matching the invoices for each charge on the credit card using the Create, Post, and Pay a Voucher article.
In the Expense Account lines, enter the appropriate GL expense accounts. Click Save.
Click Pay in the left-side menu.
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Enter the Pay Voucher information, and then click Create Check.
Pay the voucher from the Credit Card Liability Account, not from a bank account.
Always select the Check Type ELECTRONIC for this type of voucher.
Click Yes, Post Check and Overdraw Account to overdraw the Credit Card Liability account.
Example of an individual voucher to record an expense charged to the credit card
Example of General Ledger transactions after recording the credit card expense
Other Options to Record the Credit Card Expenses
Depending on your reporting needs and the amount of credit card transactions that need processing, you may use alternative routes of recording credit card expenses.
These options omit individual dates of the credit card expenses, as well as the ability to report by merchant. Vendor records of actual merchants will only show payments made with methods other than credit cards, and may be incomplete.
Grouped Voucher Approach: One large voucher that lists all the expenses under it, with a generic vendor.
For this option, one large voucher (possibly multifund) is created once a month to reflect all the credit card expenses.
Collect and hold on to all receipts until the end of the month.
The voucher will have many expense line items.
All expenses will be dated as of the same day.
Use a generic vendor.
If using a generic vendor for credit card transactions, these transactions are not reportable on the vendor level as they will not be linked to the specific vendor/merchant profile.
Example of a grouped voucher to record credit card expenses
Combination Approach: Some Individual Vouchers and Some Grouped Vouchers
This is a G/L Report for the Credit Card Liability Account when a combination approach is used. The description column contains the vendor to which that expense was charged. In this example, some charges were posted to the individual vendor profiles, and some were grouped under a generic vendor.
The following expense is from a grouped voucher that contains charges to several different vendors.
The Furnace Repair charge to Vandelay Industries does not appear on the vendor record for Vandelay Industries alongside the charge for an equipment purchase that was recorded via an individual voucher.
Step 2: Record the Monthly Payment to the Credit Card Company
At month-end, create a combined voucher with the credit card institution (e.g., Visa, AmEx, etc.) as the vendor. If the expenses crossed funds, make this a multifund voucher. The total amount of this voucher should match the monthly credit card statement balance. Since you already recorded the appropriate general ledger expense account with the original charge voucher, you will now use the Credit Card Liability Account in the Expense Account line(s) on this voucher.
Create a combined voucher with the credit card institution (e.g., Visa, AmEx, etc.) as the Vendor.
Use the Credit Card Liability Account in the Expense Account line(s).
Click Pay in the left-side menu.
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Enter the Pay Voucher information, and then click Create Check.
Pay the month-end voucher from a Bank account to the Credit Card Institution.
Select the Check Type ELECTRONIC only if withdrawn from your bank account or paid electronically. Otherwise select the Check Type CHECK.
Example of General Ledger transactions on the Credit Card Liability Account, demonstrating line items for the expenses charged (Pref = check) and line items for the payment to the Credit Card company (Pref = voucher).