christybeth wrote: ↑Mon Feb 06, 2023 4:54 pm
We do not have a liability account for the credit card and that was not the way I was taught by the previous bookkeepers. Sounds like that may make my life easier and I can add a liability account though. This does leave me with more questions but let me answer your others first.
The staff turn in all of their receipts throughout the month and I let them know what I am missing when I retrieve the credit card statement. All receipts are in when I make the full payment by the end of the month.
We are using the online version of PC. When I saw your comment about voiding and reissuing the original manual check, the lightbulb
came on. It's that crazy time of the year for us bookkeepers that tends to get to us all!
The $1 that I was off was easily corrected so thank you!!
Glad to hear my comment turned on the light
Questions now since this is not how I was taught... I will probably book CC expenses by the individual employees. I have several that are really good at turning in their receipts right away and I think it would be easier to lump staff expenses together. Assuming this is done in AP but what do you use for a Reference code? Usually, I would put Inv(oice), Support, or Reimb(ursement) as the reference. Do you put CC there and the month? How do you know how much to pay at the end of the month when they are all booked separately? Feeling vulnerable here as this isn't how I was taught but I would love to simplify things!
Any chance you could snip a pic of one of your CC expenses and payments so I can see it? I learn visually!
Appreciate all of your help!!
You would enter these Credit Card charges as Manual Checks, instead of a check number, I usually just use BOA-CC. As far as documentation, I usually enter what was purchased in the 'Line Description' and the notes block at the bottom
No need to add 'month' as the date of entry handles that. The Credit Card liability account is setup as 01-2415-000 and I use that instead of the checking account as the CREDIT account. The Expense account is, of course, the DEBIT account and is usually the one for the ministry or area of ministry the purchase was made. So if someone purchased candles for Worship, the transaction lines on the manual check would look like this:
01-2415-000 BOA Credit Card CREDIT 110.00
01-5520-000 Worship Supplies DEBIT 110.00
The funds are moved to the liability account, and the I&E report properly shows the expense in the month it was made, and not the following month when the statement comes in and the bills are paid.
When the statement comes in. you would reconcile the account just as you would a bank account, using the reconcile band/credit card function. You would select the liability account, and enter the closing balance much as you would the bank statement.
When you continue into the reconciliation, you'll see the list of purchases, which you would check off against the Credit Card statement. If you're missing any receipts, you would postpone the reconciliation, and track down the 'offender', enter the receipt (again as a manual check and for the date of purchase), post AP, then post to Funds Accounting. Go back into reconciliation, again select the liability account, then continue in and clear all the transactions. Just as with the bank account, if you see 0.00 at the bottom, you've got them all, and are reconciled.
You then go into AP to pay the bill, as you normally would as an open invoice, but instead of a expense account, you would use the Credit Card liability account as the DEBIT account, and the Checking as the CREDIT, since all the funds are waiting in the liability account to be paid out.
Does this help?
EDIT:
I had forgotten that there was a Knowledgebase Article from 2015 on this, it may be a few years old, but it does show examples. You would want to use the second scenario that says "if you keep a balance". I doubt you do, but the process is the same. If you have questions, don't hesitate to ask:
https://www.powerchurch.com/support/441 ... pring-2015