The Step-by-Step Guide to Paying Credit Card Bills in QuickBooks

If your business uses credit cards for purchases you’ll need to pay those credit card bills regularly in QuickBooks to keep your books accurate. QuickBooks makes it easy to enter credit card charges and pay the resulting bills. In this comprehensive guide we’ll walk through the entire process step-by-step.

Whether you use QuickBooks Online or QuickBooks Desktop, you can follow these instructions to properly record credit card charges and make payments. Let’s get started!

Setting Up the Credit Card Account

The first step is setting up the credit card account in your QuickBooks chart of accounts. Here’s how:

Navigate to the Chart of Accounts page and click “New” to add an account.
Select “Credit Card” as the account type and click continue.
Name the account after the credit card (Chase Visa, AMEX Business, etc).
For the opening balance, enter the current balance owed on the card.
Click Save and Close.

Now your credit card account is ready to use in QuickBooks for recording charges and payments.

Entering Credit Card Charges

Each time you make a purchase with the credit card, you’ll need to enter a charge in QuickBooks. Here are the steps:

Go to Banking > Enter Credit Card Charges.
Select the credit card account.
Choose if it’s a purchase/charge or a refund/credit.
Pick the vendor who the charge is from.
Enter the date and amount of the charge.
Add details like the memo and expense account.
Click Save and Close.

The credit card charge is now recorded in your books, increasing the balance owed for that card. Repeat these steps each time you make a new credit card purchase.

Paying the Credit Card Bill

Once you receive the monthly statement from the credit card company, you’ll need to pay the bill in QuickBooks. There are a couple ways to do this:

Option 1) Write a Check

If you plan to pay the bill immediately, you can directly write a check in QuickBooks:

Go to Banking > Write Checks.
Select the bank account to pay from.
Enter the credit card company as the payee.
Enter the payment amount.
In the Expenses tab, select the credit card account to pay down.
Save and close.

Option 2) Enter Bill for Payment Later

If you don’t plan to pay the bill right away, you can enter it as a bill to be paid later:

Go to Vendors > Enter Bills.
Select the credit card vendor and enter bill details.
In the Expenses tab, choose the credit card account to pay.
Save the bill.

Later, when you pay the bill, just go to Vendors > Pay Bills and select the credit card bill to pay.

Either way, the payment reduces your balance owed for that credit card in QuickBooks.

Reconciling the Credit Card Account

Finally, you should periodically reconcile the credit card account to match the balance in QuickBooks to your monthly statement. Here are the steps:

Go to Banking > Reconcile.
Select the credit card account.
Match any cleared payments/charges to the statement.
Adjust the ending balance to match the statement.
Review for any discrepancies.
Click Reconcile Now.

Reconciling the account confirms your QuickBooks records match the true activity on the card and helps uncover any errors.

Tips for Managing Credit Card Payments

Here are some tips for smoothly managing credit card payments in QuickBooks:

Reconcile accounts monthly to catch errors.
Set up autopay of the full statement balance each month.
Use the memo field to document what each charge was for.
Enter your charges regularly – don’t let them pile up!
If you see fraudulent charges, report them to the card company ASAP.
Keep payment method details secure within QuickBooks.
Contact the card company with any statement discrepancies.

Proper credit card management in QuickBooks ensures you have accurate financials and protects your business against issues.

Automating the Process with Rules

You can save time by setting up transaction rules in QuickBooks to automate recording credit card charges and paying bills.

For charges, you can create a rule that automatically enters charges from a certain card or vendor into QuickBooks.

For payments, set up a rule to automatically add the credit card bill as a bill to be paid on the due date each month.

Consult our guides on transaction rules in QuickBooks Online and Desktop to automate your credit card transactions.

Errors to Avoid When Paying Credit Cards

It’s important to follow best practices when paying credit cards in QuickBooks to avoid common errors:

Don’t enter charges directly to an expense account. Always use the credit card account.
Don’t pay more than the total statement balance unless you made new charges.
Don’t record a credit card payment without also recording the charges first.
Don’t pay a card from an account that doesn’t actually have the funds.
Don’t reconcile an account without entering all charges/payments first.
Don’t forget to apply payments to the correct credit card account.

By being mindful of these errors, you can maintain accurate credit card records in QuickBooks.

Paying Personal vs Business Cards

If you mix personal and business expenses on the same credit card, pay special attention:

Enter each charge to the right account (personal or business).
Reconcile personal and business charges separately.
When paying the bill, determine the business vs personal amounts and document accordingly.
Pay the business portion from a company account in QuickBooks.

Keeping personal and business credit card activity clearly separated in QuickBooks is key.

Getting Help with Credit Card Payments

If you have any trouble paying credit cards in your QuickBooks account, don’t hesitate to reach out for help:

Consult the QuickBooks help documentation for your product.
Check forums like QuickBooks Community for guidance.
Contact QuickBooks customer support via phone, chat, or email.
Hire an accountant or bookkeeper to assist you.
Invest in QuickBooks training or courses to build your skills.

With the right knowledge, paying credit cards in QuickBooks doesn’t have to be intimidating! Follow this guide and leverage available resources whenever you need assistance. Proper credit card management will keep your business finances reconciled and accurate.

How To Pay Credit Card Bill In Quickbooks

Pay down a credit card

This is the main way to record your credit card payments in QuickBooks.

Select + New.
Under Money Out (if you’re in Business view), or Other (if you’re in Accountant view), select Pay down credit card.
Select the credit card you made the payment to.
Enter the payment amount.
Enter the date of the payment.
Select the bank account you paid the credit card with.
If you made a payment with a check, select I made a payment with a check. In the Check no. field, enter the check number, or if you paid electronically, enter the EFT number.
If you want to add notes or file attachments, select Memo and Attachments and follow the instructions on the screen.
Select Save and Close.

Have you already been using other ways to record credit card payments? You can keep using them if you prefer.

Write a check: If you made a credit card payment using a check, you can record it in QuickBooks by creating a check.

Select + New.
Under Vendors, select Check.
In the Payee field, select the (Vendors name) for the credit card payment.
In the Bank Account field, select the account from which the payment will be made.
Enter a Mailing address and select a Payment date.
In the Check no. field, enter the check number, or If paid electronically, type the EFT.
Uncheck Print Later if the check was already issued.
Enter the Category details and a payment amount.
Enter a description and an amount.
Enter notes under Memo.
Select Save and Close.

Make a payment after reconciling your credit card

Go to Settings ⚙, then select Reconcile.Tip: You can also select Reconcile from the Transactions tab in the MENU ▼.
If its your first time, select Get started and Lets do it.
Select the credit card account.
Enter any missing transactions from the statement and adjust any incorrect transactions, if there are any.
Once the difference is zero, select Start reconciling.
In the Reconcile screen, select the checkbox next to the transactions that match the transactions on your statement to mark it as cleared.
Select Finish now, then select Done.

If you run into any issues with your reconciliation, learn what to do if QuickBooks Online doesnt match your statement at the end of a reconciliation.

Quickbooks 2021 Tutorial for Beginners – How to Pay Bills With a Credit Card

FAQ

Is credit card payment an expense?

A card payment isn’t an expense, the expenses were recorded already in the card account. The use of an Income category makes you wealthier. The use of an Expense category makes you poorer. A Transfer does neither.

How do I record credit card payments in QuickBooks?

This is the main way to record your credit card payments in QuickBooks. Select + New. Under Money Out (if you’re in Business view), or Other (if you’re in Accountant view), select Pay down credit card. Select the credit card you made the payment to. Enter the payment amount. Enter the date of the payment.

How do I create a credit card payments account in QuickBooks Online?

To create a new Credit Card Payments account in QuickBooks Online, click the gear icon in the top right corner and then choose “Account and Settings”: From there, click the “Payments” tab on the left navigation bar:

How do I pay a credit card using a bank account?

Follow these steps: Go to the Banking menu and select Write Checks. from the Bank account dropdown, select the bank account you want to use for paying the credit card. Select the date of your payment and the credit card company from the Pay to the order of dropdown. Enter the amount.

How do I pay my credit card invoices in QuickBooks Desktop?

You can pay your credit card invoices in QuickBooks Desktop via two methods: pay when reconciling your credit card account and pay without reconciliation. This tutorial covers both. To understand the instructions better, we recommend that you follow along in your QuickBooks Desktop account.