Credit Card Setup and Payments
I'm looking for some guidance on the process to handle credit card charges by employees. I have poured over every entry in the Knowledge Base and User Community, but am still unsure how to handle these with an efficient process. I feel like I'm spinning my wheels at this point.
We have 9 employee credit cards. The employee pays the card and we reimburse the employee. Some purchases are raw materials and have corresponding POs, and some are travel expenses and have corresponding Expense Reports.
I've found this entry (https://support.accountingseed.com/hc/en-us/community/posts/219216468/comments/115000393888) most helpful and have tried to setup our process to model this, but I'm not quite sure what steps to take. Sorry to sound dense, but is there a step-by-step guide somewhere in the Knowledge Base I'm missing?
I've created the Paid by Credit Card-Employee liability accounts. When I create a payable from the PO or Expense Report, do I use the AP Control Override field to select the Paid by Credit Card liability account? And, do I select the employee as the Payee, not the vendor? Then, when I pay the payable, do I select the Paid by Credit Card account as the "bank account"?
How do I handle importing credit card charges? Use the AP Control Override field again? I want to make sure I'm capturing expenses by vendor. Will this accomplish that?
One other question, what is the Credit Card Payee field and should I be using this?
Thank you for any input on this! Sorry to sound so clueless.
Hi Sara :-) You're not clueless! It can be a little (or more than a little) confusing. The added wrinkle of the employees paying their own cards makes it more complicated.
If you are downloading all the credit card transactions, what GL Account do you use to code the payments your employees make to the cards?
Many customers are setting up the credit cards on bank direct connect and bringing the charges in as Cash Disbursements.
If the charge is related to a Purchase Order, they typically create a payable from the purchase order and apply the cash disbursement to the payable. You can do this now in AS.
If the charge is related to an expense report many customers are creating a lookup on the cash disbursement and matching this to an expense line on the expense report to show it as paid. This method is typically used if the employer pays and manages the credit card.
Thanks, Rebecca! Your posts are always SO helpful.
I've only experimented with one month so far. I used Bank Direct Connect to bring in all credit card charges (for one of the cards) and posted them to the corresponding GL Liability Account "Paid by Credit Card ####". I'm stuck on what to do after that. The Bank Direct Connect isn't finding matches even when the payable is posted and an identical date and amount. I liked the idea of using a clearing account.
I can either pay directly to the AMEX or to the employee. However, as I mentioned, I liked the idea of using a clearing account and then just paying the balance out each week or month.
This sounds great. Thanks. Seems to be pretty straight forward. I've been trying this process this morning, but for some reason, the Bank Direct Connect is not finding matching data. I've made sure the payable is the identical amount and date, and have also made sure it's posted. Should I not be looking for matching data? Just import the transaction as a disbursement? If so, to which account, the Paid by Credit Card acct? Then apply the disbursement to the payable? Do I create another payable to the employee?
Tony's right - my original post that you linked to was written before the ability to reverse apply a cash disbursement was available, and you could only pay a payable *from* the payble.
I believe if you're entering a charge from Bank Direct connect that is going to be applied to an outstanding payable, you'd make the debit GL Account a vendor prepaid account - or you could use the "paid by credit card" account. Whichever account you choose should be offset by the AP Disbursement when you apply the Cash Disbursement to the payable.
The credit side of the Cash Disbursement, the "bank account", would be your Amex card.
If the employee pays the credit card balance - when the transaction comes in through Bank Direct Connect, how do you record that entry? Whichever GL Account you choose for that, you can then create an AP to be paid to the employee, and just make sure you choose the same GL Account for the debit GL Account on the AP line.
If you'd like to connect on this further, you can email me directly at firstname.lastname@example.org.
I record credit card transactions in the vendor that the transaction took place with a cash disbursement and the form of payment is a credit to the credit card GL. When I make a payment to the credit card company I was using a cash disbursement, but now it will not allow me to uncheck bank box in the credit card GL.
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