Wednesday, June 28, 2006

Credit Card Reconciliation

I was just reconciling my clients credit card statement in Quickbooks and it reminded me that there are quite a few people who manage this task incorrectly. I have even seen some bookkeepers do it wrong as well.

The part that is incorrect is that they treat the Credit Card bill just like any other bill from a Vendor. They just enter it into the bill section, itemize the different purchase and when the credit card payment is sent they apply the amount to the bill.

A credit card should be treated just like any other Bank Statement. Quickbooks even has a type of account called "Credit Card" that you can setup. You then can enter each purchase into the ledger and then reconcile like a regular statment.

Take the time to setup this method and you will save a lot of headaches later when looking up a purchase or credit from your credit card

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