How to record expenses paid on a credit card & then the credit card payment

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Apologies if this is a silly questions, we have currently got an Amex card to pay bills through our company, we also use it for general expenses while on the road.

How is best to record these transactions? if i do a cheque transaction, its going to show the transactions as paid, although they are through amex, they arent realistically until i pay the card.

Can someone who knows how to do this help me out or anyone in the similar position?

Thanks 
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Rochelle

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Posted 11 months ago

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Karen Solari

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Hi Rochelle,

You need to create a new account (the same as you would create an Expense Account) however, you select the Credit Card option.  Once you've created this you can then enter the charges using the 'Enter Credit Card Charges' function.  You can also enter Credit Card Refunds this way.

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Vickie Wesolowski

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Hi Rochelle
I'm not sure what version of Reckon you're using but hopefully this will work for you.
Firstly you need to set up an account for the credit card in your Chart of Accounts.
Whenever you want to record a transaction use "Enter Credit Card Charges" under Banking with the charges going against the account you created.
Create a supplier called Amex then each month write a cheque to this supplier for whatever amount you're paying off the card.
You should also reconcile the credit card account when you reconcile your bank accounts monthly.
Hope this helps.
Vickie
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Linda Putland, Accredited Partner

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Hi Rochelle - I would create the Credit Card account as suggested above - but in a business environment - I would enter the bills as normal - but when processing Pay Bills - you select the Credit Card option - for payment method - and select the AMEX card to pay the bills from - other general expenses can be entered through Enter Credit Card Charges when you get the statement - eg Fuel and other direct purchases...  

From a BAS perspective - business expenses are "paid" from the date that your process the Pay Bills to the Credit Card (or enter via Credit Card Charges) - the fact that you now owe a debt to AMEX that is paid at some future time is irrelevant to the ATO...

Hope this helps further clarify your options?
Cheers Linda
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Kevin Russell, Accredited Partner

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Linda why do you need to enter the bills? You could download the qif file from Amex and import it directly
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Linda Putland, Accredited Partner

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Maybe so - but if running a business where accrual reporting was required - and bill received one month, but paid via Amex the following month - there would be a good reason for entering the bill - its all about specific circumstances and reporting requirements - because the question related to a business, I felt it was important to explain how to use Credit Cards for Pay Bills in that situation.
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John Graetz

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I agree with you Linda.  There is another thing to be careful of though, with regards to the on-the-road transactions.  In my environment, Westpac issues its statements towards the end of the month, which means that some transactions for say December are only going to appear on the January statement.  Be careful to ensure that where your BAS has been completed for say December, that you do not enter those December transactions appearing on the January statement, using the December date, or they will not be correctly reflected for BAS purposes, meaning that you would miss out on claiming back the GST for those transactions.
John L G
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Linda Putland, Accredited Partner

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Thanks John - yes, that can be a trap for the unwary... where my clients have credit card statements that cross over the month like that, I always make sure I have received the following months CC statement and entered those charges before I complete the BAS.  However, if clients are doing their own bookwork and inadvertently miss those entries - then the annual GST reconciliation that I do, would pick up any missed GST like those entries, that has not previously been claimed.  Cheers Linda
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Ramkrishna Bansal

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Hi Kevin,

I wish to import the Amex credit card statement QIF file in Reckon Accounts Hosted, but always get an error message that not a valid financial institution. 

Do I need do it differently?

Thanks!