Prepaid Debit Card - Accounting

[RC_USER]

Hello

We have 1 bank account (checking)
We transfer money from our checking account (via check) and load prepaid card for a few purchases a month.
What's the best way to manage this, including the fees and leftover balances. We recently set up accounting and ran into a snag with this one.

Thanks for your help!

[JohnDMeyers]

Load up card:
CR 01-1110-000 checking $200.00
DB 01-1230-000 pre-paid card $200.00

Pay for $5.00 item:
CR 01-1230-000 pre-paid card $5.00
DB 01-5610-000 item expense $5.00

[JohnDMeyers]

Second possibility:

If the pre-paid card is actually part of the checking account:
Load up card:
CR 01-1110-000 checking $200.00
DB 01-1110-005 pre-paid card $200.00

Pay for $5.00 item:
CR 01-1110-005 pre-paid card $5.00
DB 01-5610-000 item expense $5.00

[RC_USER]

Perfect. Thank you

[RC_USER]

So on a monthly basis, what would I do with any leftover balance?
Note: The prepaid card is not tied to the checking account.

Thanks

[Jeff]

The balance on the card should still be in the account. The 01-1230-000 account in John's example. When you transfer more money it will add to it.

Does the credit card company remove the money or do anything to the balance?

[RC_USER]

The balance on the card should still be in the account. The 01-1230-000 account in John's example. When you transfer more money it will add to it.

Does the credit card company remove the money or do anything to the balance?

Yes the balance on the card remains, minus a few fees. If I transfer more money, yes it will add to the balance.

[RC_USER]

Last question on this. We have everything in order and ready to post, but not sure if the DB account in example should be a new "Accounting Fund" or "New Chart of Account"?

Thanks again

[NeilZ]

Last question on this. We have everything in order and ready to post, but not sure if the DB account in example should be a new "Accounting Fund" or "New Chart of Account"?

Thanks again

The pre-paid card account should be setup in the same fund as the checking account.

If the card is used only in operations - and the Operations fund is 01 - then that's where it should be setup.

However, say this card is being used by the deacons to cover deacon purchases, and they have their own fund - 02, then it should be setup to use the checking account setup under fund 02

Does that help ?

[RC_USER]

ok...I was thinking that, but wasn't sure.