Get Started with Credit Cards

Before you begin recording credit card payments, consider the following:

  • Credit card accounts use the same security as bank accounts, including account record specific security. If you do not have these rights and think you should, contact your system administrator.

  • Carefully consider how the billing is currently handled by the vendor linked to the credit card. This will help you make decisions as you set up credit card accounts. Some organizations have multiple credit cards that roll up to one main account. For example, corporate credit cards often have numerous individual cards, or subsidiary cards, all reported on the same credit card statement. You should understand how your organization is billed when you select the billing type.

    For a detailed example, see Credit card setup example below.

  • When setting up the credit card account, if you select "One statement per card," you are asked to specify the GL liability account to use. You must decide if you want to use a liability account for each credit card, or if you want one account for all credit cards. Each credit card must have a default GL liability account. This serves as a clearing account. After a credit card statement/bill is received, this account should have a zero balance.

    Note: We recommend you not use an AP Summary account as the GL liability account.

  • There is some setup required when creating credit card accounts. We recommend you create your card types, and credit card adjustment categories before getting started. To add new credit card type, go to Settings, Fields and tables.

  • If you are currently using a workaround in Bank accounts or Journal entries to track and manage credit card payments, we recommend you pay off the card balances, and begin using the credit card functionality after the month-end or year-end close.

When you set up your credit card accounts, you should consider how the billing is currently handled by the vendor linked to the credit card.

For example, let’s say Bank of America is a vendor and sends a consolidated statement containing three subsidiary Visas, totaling $100,000 (V1 = $20,000, V2 = $30,000 and V3 = $50,000). We recommend creating one credit card account for three subsidiary cards. That way, you will have one register, which can be filtered by subsidiary card, and the payment of $100,000 would pay off the register balance to zero.

In the example above, if you create three separate credit card accounts, then three registers will be created. The vendor statement of $100,000 will need to be divided into three invoices (V1 = $20,000, V2 = $30,000 and V3 = $50,000), and you will make three separate payments to update each of the three registers.

However, if Bank of America sends three separate statements (one for each subsidiary Visa), we recommended you create a credit card account for each subsidiary.