Booking credit card transactions / statements

Overview

• Initial situation
• Creating a credit card account in the Chart of Accounts
• Booking expenditure and remuneration
• Receipt of credit card statement
  • Verification
  • Booking
• Reviewing the account sheets

Initial situation

Paying a meal by credit card creates a liability to the credit card company (e.g. Viseca). In order to reflect this liability in your bookkeeping, you need to have a settlement account that is maintained as a liability account in the "Short-term interest-bearing liabilities" account group. The balance of the settlement account also indicates the invoice amount that you can expect to receive from the settlement company.

Creating a credit card account in the Chart of Accounts

Create a new account for the credit card under "Settings" - "All Settings" - "Accounting" - "Financial Accounting Chart of Accounts", or use an existing account.

For example:

Please note that this account can only be used for manual bookings. Expenses and invoices from suppliers or other creditors cannot be booked to this account. A "banking account" would have to be created in order to do this. However, it could not be created as a liability account, so we will not discuss this any further.

Booking expenditure and remuneration

Every credit card payment creates a liability to the payment service provider. Load the expense documents into your bexio inbox and create manual bookings from them. You can also do this by entering the individual items that were booked to the credit card under "Accounting" - "Manual booking". The offset account for the booking is always the credit card account created beforehand (e.g. 2190). The expenses are collated in this account.

Receipt of credit card statement

Verification

When you receive your monthly statement, the first step is to check whether the total amount of the statement matches the balance on your "Credit Card" (2190) account. Any discrepancies can be corrected by means of a manual booking.

Booking

Next, create a new supplier invoice. The offset account is 2190 again. The balance of the 2190 account should then have been reconciled.

If the total amount is automatically deducted at the end of the accounting period by means of a direct debit, the bank transaction can be processed simply by making a manual booking to account 2190. In this case, there is no need to create a supplier invoice.

Reviewing the account sheets

If you now go to "Accounting" - "Reports" - "Account sheet" and set the filter to account 2190, you can check that the credit card transactions have been reconciled after being debited from the bank account.

For example:

This process should be repeated monthly with every credit card statement.

As we said before, there are other ways to book credit card statements, but since this article is intended to be a "Best Practice for accountants", we cannot cover all the other options.