In CORE, you can record credit card charges (expenses) through different options, depending on whether you need the itemized details or not. Here is the recommended way of handling your credit card bills as well as their payments.
- Create a Credit Card Vendor: The first step is to create a vendor tied to the credit card company. To do so:
- Open the Vendors screen from the main menu > Contacts.
- Click Create New and add a new vendor record, say Chase Credit Card.
- Save the information. Check CORE Help Center for details.
- Enter Credit Card Charges: You can enter the individual credit card charges manually in the Credit Cards screen. Here you might be prompted to add a credit card account (say Chase Credit Card), if not already there. Check CORE Help Center for details.
Alternatively, you can use the Cloud Feeds feature to automatically download your credit card charges directly into your CORE company file. You can also set up the cloud feed rules for the future. Check CORE Help Center for details. This creates a liability against the credit card account and also records the expenses to the appropriate accounts and projects. This is recommended as it allows you to view the expenses by project or vendors (say how much your company spent on marketing expenses, client meetings, travel, conferences, etc.).
- Pay Credit Card Bills: The easiest way to pay the credit card bills is to write a check to the credit card vendor created in step 1. You must pay the check against the credit card account to decrease its liability:
- Open the Checks screen from the main menu > Accounting.
- Click Create New and select the bank account from where the money will be withdrawn.
- Select the newly created credit card vendor 'Chase Credit Card' as the Payee.
- On the Accounts grid, select Chase Credit Card as the Account.
- Cut a check for the balance to pay and save the transaction.
Alternatively, if you want the credit card liability to reflect on your A/P Aging report, you can transfer the liability to the A/P account by creating a vendor bill. Otherwise, credit card charges on their own do not reflect on the report. It is one of the important reports that is looked at by management and you typically want all liabilities, including credit card charges, to be there. You can then pay the liability by creating a bill payment for the vendor bill, as usual.
- Enter Vendor Bills: To transfer the liability from the credit card account to your accounts payable, you can use the Vendor Bills > Accounts tab when creating the vendor bill. Check CORE Help Center for details. The information on your credit card statement can correspond to the details needed in the vendor bill:
Vendor Bill Date = Billing Period End Date
Due Date = Payment Due Date
Vendor = Credit Card Company
Account = Credit Card Account
Amount = Statement Balance Amount
The vendor bill decreases the balance owed on the credit card liability account and transfers it to the A/P liability account, increasing its balance. Creating a vendor bill for the credit card charges ensures that those expenses are included in the cash-flow projections and A/P reports, such as A/P Aging.
- Pay Credit Card Bills: Now you can pay your credit card expenses through the vendor bill created above as usual, whether partially or fully, thus decreasing your A/P liability created above. This can be done from the Bill Payments screen. Check CORE Help Center for details. When using Cloud Feeds, you might see a credit card payment there; instead of adding it to CORE, you can map it to the same vendor bill created above.
Note: If you are transferring liability from the credit card account to the A/P account, you need to make sure that any credit card refund transactions are also handled. Such transactions reduce the balance owed on the credit card, and because you have already transferred the liability to the A/P account, the credit card balance can become negative. In such a scenario, you need to reduce the balance on the A/P account instead, so you should create a credit card charge against the A/P account to reduce the A/P liability and zero out the credit card account balance.
Make sure to reconcile you credit card account in CORE with the actual account statement regularly to avoid discrepancies. Check CORE Help Center for details.