Tracking Credit Cards in PowerChurch Plus

We are frequently asked how to track credit cards in PowerChurch Plus. The process varies depending on your situation.

If you pay off the card each month:

In this scenario, it will be very easy to set up and maintain. In Accounts Payable, when you create an invoice to pay the credit card bill each month, the transaction will look like the following:

It credits the checking account for the full amount of the payment and debits various expense accounts, representing purchases, interest, and fees.

If you carry a balance on the card from month to month:

This will be more involved than the previous scenario, but is still completely achievable. First, you will need a liability account to represent the credit card account on the Balance Sheet. Next, you have the option of either recording purchases in PowerChurch as you receive the receipts, or if you prefer, you can wait until you receive the credit card statement to enter transactions in Fund Accounting or Accounts Payable. Below is an example of entering a single transaction to record the activity on a monthly credit card statement:

Notice that instead of crediting the checking account like a debit card purchase would do, this transaction credits the credit card liability. Crediting the liability account adds money to the balance of that account. As you record the transactions for the purchases that occurred this month, the balance owed on the account increases. Otherwise, it is a normal transaction, debiting an expense account that represents the item or items that were purchased.

When you receive the monthly credit card statement, it will detail payments that have been received, as well as new purchases, and interest/fees charged to the account. You will need to enter another transaction that looks similar to the purchase example above, that adds the interest and fees from this statement to the liability balance.

When it is time to write the check from Accounts Payable for your monthly credit card payment, it will look like the following:

This transaction credits the checking account and debits the credit card liability. Doing so lowers the balance of the credit card liability. Note that this transaction pays off the full balance on the card. You could just as easily make a partial payment of only $50, for example, which would leave a balance on the liability account to carry forward to the next month.

After posting that transaction, the balance that shows on the Balance Sheet will reflect the actual balance owed on that credit card at month-end.

Reconciling Credit Card Accounts

If you enter individual transactions into PowerChurch for each credit card receipt, rather than a single monthly lump sum transaction, you can now use the Reconcile Bank Accounts screen to reconcile the credit card account, just like you normally do with your bank accounts. This change came in a recent Maintenance Release update for PowerChurch Plus Version 11.5. The process is unchanged when reconciling a checking or savings account. If you choose to reconcile a liability, such as a credit card account, then the process changes slightly, allowing you to reconcile the purchases and payments from the credit card statement.