Best and easiest transaction for correcting Credit Card

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christybeth
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Best and easiest transaction for correcting Credit Card

Post by christybeth »

We pay our full monthly balance each month online through the bank for our credit card and multiple staff have cards. I currently have it set up as a manual repeating check in AP. With so many staff having cards, it is typically 2 1/2 pages of transactions. :shock: What is the best and easiest way to correct if there is an error?

This month, the manual check amount was accurate but I made an error with one of the the multiple lines and was off by $1 that was a fee and I had accidently reversed the debit/credit for the $.50 fee. I was planning on doing a correcting entry in FA with the same EFT number that was entered within AP so I do not have to void and re-do the 2+ pages of transactions. See below for original and correcting entries. Is that the best and easiest practice?

Original AP post for the fee: 01-1130 Bank $.50 debit
01-5187 media & development $.50 credit

FA correcting transaction: 01-1130 Bank $.50 credit
01-5187 media & development $.50 debit
01-1130 Bank $.50 credit
01-5187 media & development $.50 debit

Also, I am wondering for future reference if I should just do an entry within AP for the full monthly balance without all of the expense lines and need to figure out an expense line to use. Maybe I need a line for the credit card within general fund. Then post that and go to FA and do a correcting entry with all of the expense lines. If there is an error, then I can reverse/correct it within FA. Thanks for your assistance!!

NeilZ
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Re: Best and easiest transaction for correcting Credit Card

Post by NeilZ »

christybeth wrote:
Fri Feb 03, 2023 2:57 pm
We pay our full monthly balance each month online through the bank for our credit card and multiple staff have cards. I currently have it set up as a manual repeating check in AP. With so many staff having cards, it is typically 2 1/2 pages of transactions. :shock: What is the best and easiest way to correct if there is an error?

This month, the manual check amount was accurate but I made an error with one of the the multiple lines and was off by $1 that was a fee and I had accidently reversed the debit/credit for the $.50 fee. I was planning on doing a correcting entry in FA with the same EFT number that was entered within AP so I do not have to void and re-do the 2+ pages of transactions. See below for original and correcting entries. Is that the best and easiest practice?

Original AP post for the fee: 01-1130 Bank $.50 debit
01-5187 media & development $.50 credit

FA correcting transaction: 01-1130 Bank $.50 credit
01-5187 media & development $.50 debit
01-1130 Bank $.50 credit
01-5187 media & development $.50 debit

Also, I am wondering for future reference if I should just do an entry within AP for the full monthly balance without all of the expense lines and need to figure out an expense line to use. Maybe I need a line for the credit card within general fund. Then post that and go to FA and do a correcting entry with all of the expense lines. If there is an error, then I can reverse/correct it within FA. Thanks for your assistance!!
Why aren't you using a Credit Card Liability account. This way as the receipts come in, you just enter them in, and eliminate having to do all that entry at one time. You can then properly charge the correct expense account, and the funds are moved to the liability. (DB the expense and CR the liability) You would then just reconcile the credit card statement with the liability account the same way you reconcile your bank account. It would save you a lot of time, and make correction MUCH easier. You would then pay the credit card using just two accounts, Checking and Liability .. two lines. DB the liability and CR the checking.

If the staff is NOT bringing you any receipts as they purchase, you are opening the church to possible fraudulent activity. Another piece of advice I give is that this be part of any church's financial policy. All receipts should be turned in to the office immediately.

That said. what version of Powerchurch are you using?? if v12 and higher, you should be able to VOID and REISSUE the original check. I always tell people that ANY corrections should be made in the original module as this keeps the audit trail clean.

The 'reissue' would be created as a MANUAL check (just like the VOID transaction is) you can then make the change there and not have to enter in all that information. Let the system do the reversing so you don't have to :)

I'd test it doing a backup of the Accounting files first, then if it doesn't work right, you can restore to before the changes.
Neil Zampella

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christybeth
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Re: Best and easiest transaction for correcting Credit Card

Post by christybeth »

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 :idea: came on. It's that crazy time of the year for us bookkeepers that tends to get to us all! :shock: The $1 that I was off was easily corrected so thank you!!

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!!

NeilZ
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Re: Best and easiest transaction for correcting Credit Card

Post by NeilZ »

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 :idea: came on. It's that crazy time of the year for us bookkeepers that tends to get to us all! :shock: 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
Neil Zampella

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christybeth
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Re: Best and easiest transaction for correcting Credit Card

Post by christybeth »

How does this work when you have expenses in other fund? Do you post all to the general fund CC liability line and have to make a bunch of transfers? Thanks again for your wisdom!

NeilZ
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Re: Best and easiest transaction for correcting Credit Card

Post by NeilZ »

christybeth wrote:
Thu Feb 09, 2023 11:55 am
How does this work when you have expenses in other fund? Do you post all to the general fund CC liability line and have to make a bunch of transfers? Thanks again for your wisdom!
It works the same as your checking account. I am assuming that you use the same checking account for both funds.

That said, the ideal thing would to have a different CC (and CC liability account) for the other fund to insure that the proper fund is always used to purchase things.

You'd have the same liability account number in the other fund, you would enter the purchases using the other fund's expense accounts, and the liability account (IE: 01-2219-000, 02-2219-000). The reconcile would be exactly the same as the checking, as they would both show up on the reconcile.

The only thing you'd have to do is when the statement came in and after the reconcile, is to run a 'Selected Transactions' report on each liability account for the statement dates to get a total from each. Then create the check in AR using both checking accounts for the CREDIT and both liability for the DEBIT. IE: Expenses in Fund 01 - 250.00, expenses in fund 02 - 100.00

01-1110-000 Checking CREDIT 250.00
02-1110-000 Checking CREDIT 100.00

01-2219-000 CC LIab DEBIT 250.00
02-2219-000 CC Liab DEBIT 100.00

Check total, $350.00

Does this help?
Neil Zampella

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christybeth
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Re: Best and easiest transaction for correcting Credit Card

Post by christybeth »

Thank you! This has been very helpful.

Another question, when you are booking the manual check to the liability account for credit card expenses purchased, do you pay to the order of BOA-CC in your case or USBank for ours? Or did you set up another similar vendor name for all of those transactions that was slightly different? Like USB-CC. I'm just thinking that is a lot of transactions to search through if you are looking for one in particular and what was paid when, etc.

Thanks again!!

NeilZ
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Re: Best and easiest transaction for correcting Credit Card

Post by NeilZ »

christybeth wrote:
Tue Feb 28, 2023 2:22 pm
Thank you! This has been very helpful.

Another question, when you are booking the manual check to the liability account for credit card expenses purchased, do you pay to the order of BOA-CC in your case or USBank for ours? Or did you set up another similar vendor name for all of those transactions that was slightly different? Like USB-CC. I'm just thinking that is a lot of transactions to search through if you are looking for one in particular and what was paid when, etc.

Thanks again!!
The BOA-CC is just used as a check number/reference holder. It shows that the purchase was done by credit card. All purchases are made using the correct vendor setup in the system. For examples, Amazon, Staples, etc. This keeps everything easily visible, and auditors have no questions about what was purchased and from whom.
Neil Zampella

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christybeth
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Re: Best and easiest transaction for correcting Credit Card

Post by christybeth »

Ah ha! That makes sense and makes it easier to track everything and why you suggested inputting as I receive them. Again, this is not how I was trained so I need to retrain my brain to this method.

Hmmm...with it being the last day of the month and the Credit Card is due today, I am going to have to wait until next month for this now. I had started entering a bunch of transactions but know now that I did not do them properly. Fortunately, I did not post most of them. I was entering the transactions grouped by all of an employees purchase from the statement and with their receipts. It is going to take less time at this point to post it how I had in the past and start next month fresh with what you suggested.

Thanks again for all of your help!

christybeth
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Re: Best and easiest transaction for correcting Credit Card

Post by christybeth »

I was able to reconcile the credit card and balance it! Yay!!

Question though - there are items posted that did not clear within the dates of the statement. So, when I run a Selected Transaction report for the dates of the credit card statement to determine which funds need to be debited and credited for the payment, the amounts are going to be off from the balance due of the statement. Do I need to edit and change the dates of all transactions that did clear to a later date outside of the statement? We had a few credits and two funds with transactions this month.

Thanks again for all of your help!

NeilZ
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Re: Best and easiest transaction for correcting Credit Card

Post by NeilZ »

christybeth wrote:
Wed Apr 05, 2023 6:52 pm
I was able to reconcile the credit card and balance it! Yay!!

Question though - there are items posted that did not clear within the dates of the statement. So, when I run a Selected Transaction report for the dates of the credit card statement to determine which funds need to be debited and credited for the payment, the amounts are going to be off from the balance due of the statement. Do I need to edit and change the dates of all transactions that did clear to a later date outside of the statement? We had a few credits and two funds with transactions this month.

Thanks again for all of your help!
There will always be some items that did not make it to the credit card statement, just as there are always checks that don't make it to the bank for the end of month statement. Did your 'to balance' amount equal zero? Yes, then that's all you need to worry about. The ones that did not make the statement, will show up next time. No changes need to be made.
Neil Zampella

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christybeth
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Re: Best and easiest transaction for correcting Credit Card

Post by christybeth »

Yes, everything balanced down to zero. How do I determine the breakout amounts for each fund though with my credit card payment?

sgbani
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Re: Best and easiest transaction for correcting Credit Card

Post by sgbani »

christybeth wrote:
Thu Apr 06, 2023 11:58 am
Yes, everything balanced down to zero. How do I determine the breakout amounts for each fund though with my credit card payment?
If you have the liability account for credit card as previously suggested, you could just run an Account Activity report (a Fund Accounting Report) for the desired period of transactions, and limit it to the account number of the CC liability account. Using the previous example, it would be 2219. You would leave the fund account fields blank so it shows all funds that have that CC liability account.
in this way, you see all the transactions in the desired time period, organized by fund number.

There may be other reports that can provide similar data, perhaps more consolidated. however, I prefer using the account activity report so I can view all the transactions at once in a given period.

Shannon

NeilZ
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Re: Best and easiest transaction for correcting Credit Card

Post by NeilZ »

sgbani wrote:
Thu Apr 06, 2023 12:19 pm
christybeth wrote:
Thu Apr 06, 2023 11:58 am
Yes, everything balanced down to zero. How do I determine the breakout amounts for each fund though with my credit card payment?
If you have the liability account for credit card as previously suggested, you could just run an Account Activity report (a Fund Accounting Report) for the desired period of transactions, and limit it to the account number of the CC liability account. Using the previous example, it would be 2219. You would leave the fund account fields blank so it shows all funds that have that CC liability account.
in this way, you see all the transactions in the desired time period, organized by fund number.

There may be other reports that can provide similar data, perhaps more consolidated. however, I prefer using the account activity report so I can view all the transactions at once in a given period.

Shannon
Yep ... exactly :)
Neil Zampella

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christybeth
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Re: Best and easiest transaction for correcting Credit Card

Post by christybeth »

Okay, I ran the Account Activity report and it is the subtotals for each fund that is the breakout for the payment? I appreciate all of the help with this new process for me!

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