How do I reconcile a credit card balance payment?
ExpensePlus supports the use of 'Business Card Payments', whether they are debit cards attached to your organisation's current account or separate credit card accounts. Where you are using a separate credit card account, either for a single or for multiple cardholders, we recommend setting this account up as its own bank account in the Bank, Petty Cash & Payment Processor Accounts settings screen.
Once this account is set up in ExpensePlus, you can then upload your credit card statement within ExpensePlus and match transactions in exactly the same way as you would for other bank accounts.
Paying the monthly statement balance
Usually, where an organisation uses a credit card account, the statement balance for the current month, will be paid in full the following month by direct debit from their bank account. Within ExpensePlus, the money transferred from your current bank account to pay off the balance is dealt with as a bank-to-bank transfer. Click on this transaction in the bank matching screen for the bank account, click the + button, and select the 'To Bank / Card Account' option.
Important: You will need to upload the statements for BOTH your bank account AND your credit card account before you will be able to do this, otherwise there won't be a corresponding transaction to match to.
For example, if you have uploaded your June bank transactions but have not yet uploaded your credit card statement for June, then you won't be able to reconcile the outgoing credit card payoff payment until you upload your credit card statement which has the corresponding incoming transaction on it.
If this is the case, don't worry - you should just leave this one outgoing bank transaction unreconciled until you are able to upload the corresponding credit card statement.
Accruing for credit card transactions
Setting up your credit card as a bank account in ExpensePlus means that not only will your statements be easy to upload and reconcile, but also that your credit card expenditure will automatically appear on the date that purchases are made, which in most cases will remove the need to create accruals at year-end that you have previously done.
Typically credit card balances will be shown in the Accounts Payable section of the balance sheet, rather than as a negative cash balance. When creating year-end accounts, you should either create an accounts payable accrual and adjust the credit card balance to 0, or leave the credit card balance as negative. Don't do both of these (otherwise, you will double count your credit card expenditure). As ever, if you're unsure about this, you should speak to your Indepdent Examiner or Auditor.
Note: It is likely that your first month's bank statement will include a credit card payment that has been accounted for as an accounts payable amount in your prior financial year. If so, follow these steps:
- Set your credit card opening balance in ExpensePlus to zero (to match what was done at year-end)
Bank match this first month's credit card payment as 'direct debit / standing order / fees', and then on the adjustments screen reverse out the opening credit card balance against the same expenditure category to reduce down your accounts payable balance.
For more help with reversing opening balances, please get in touch with our support team.
To better understand the Bank Reconciliation module, please view the module overview video here.