Paying bills

QB allows you to set up your credit cards as their own account. You enter each transaction (banking>>enter credit card charges) then when actually pay the credit card bill you would use the write checks feature to record the payment. When you do this step, the "expense" account is the credit card account. This will decrease your checking account as well as your credit card balance.

Set up dummy credit card accounts for each owner/employee in question. Either import the bills as credit card charges to their respective dummy account or record the payment of the invoices by the dummy credit cards..

Set up your personal Credit Cards as business Credit Cards and pay them direct out of the company funds. Or if there are only a few small charges, set up a cash account as a bank account and make the payment for the expenses out of it to yourself, with the cash account replenished by transfers/payments from your bank account.

Hi Ian,

Based on the procedures you are currently following, here's what I suggest.

Continue to import and assign the vendor bills as you have been doing.

When you go to the "pay bills" screen, instead of choosing your regular business checking account for the payment account, create a mock bank account called, "Owner Reimbursements." Use this account at the payment account in the "pay bills" screen each time you want to record the bill as paid by your personal credit card.

At the end of the month, examine the balance of this new mock account. This is the amount you will reimburse yourself. To do so, go to the Write Checks screen by pressing Control-W. Make sure your regular business checking account is selected in the top of the screen in the Account box there. Fill in the top portion of the screen as you normally would and enter the amount of the reimbursement. In the lower half of the screen, under the Expenses tab, select the new mock account and enter the amount of the reimbursement. Save the transaction. Issue the reimbursement to yourself.

Go back to the Chart of Accounts. If you did the transaction correctly, the new mock account will have a zero balance, and your regular checking account will be lower by the amount of the reimbursement.

Let me know if this makes sense.

Jennifer Get my free eBook: "7 Common Mistakes People Make in QuickBooks ...and How to Fix Them!"

That's a great demo Jennifer! Just curious, what kind of software does one need to make something like your video showing Common Mistake #4? thanks! -James

Creating mock bank accounts for this purpose may work but makes of mess of the balance sheet displaying negative bank account balances Use of mock credit card accounts will show up as liabilites on the balance sheet which is the correct way of reporting these liabilities.

Ian

Good point. Instead of creating a mock bank account, create a mock credit card account. Use it as I described above for the mock bank account.

Jennifer Get my free eBook: "7 Common Mistakes People Make in QuickBooks ...and How to Fix Them!"

I tried Jennifers approach, creating a mock bank account to pay the bills and then writing a check to that account to pay myself. It seems to work fine using a mock bank account and the real bank account is decremented and the mock bank account balance goes to zero.

Taking Haskel's advice to do it the right way, I tried setting up a mock Credit Card (rather than bank) account from the Payment Account field in the Pay bills window. When I clicked Add New, I selected credit card from the Account TYpe and filled in the details. When I click Save & Close I get an error "This account is the wrong type for this field. Please enter a different account appropriate for this field". I assume its referring to the Payment Account field on the Pay bills window.

Am I ok to keep using the mock bank account or should i use a mock credit card account and how do i set it up?

thanks Ian

Then why would Haskel say it is ok to pay off a bill with a creidit card account? I will tell you why, because it is. There are countless times businesses pay off accounts payble with their credit cards.

Laura, go ahead and use the enter a credit card bill function and enter Accounts Payable as the account and then the vendor or who ever the actual bill it was originaly entered for and tell me it does not work.

I agree that your method works fine but you must use the Enter Credit card charges task in order to get it to work.

The OP was trying to use the Pay Bills screen. That requires a bank account. So does Write checks. That was the basis of my remarks.

Yes, I now see the basis of your remark. However my original suggestion to the OP is valid. He just does not know how to execute the method correctly.

No it doesn't. There is a nice pop-up on the Pay Bills window that will let you change from bank accounts to credit card accounts. Perhaps you need to see your eye doctor about some computer reading glasses :)

I forgot about that one. I've never had a client who wanted to record a payment to a vendor using Pay Bills and paid with a credit card. Thanks for reminder.

What are you two talking about? I pay lots of bills via credit card on the Pay Bills screen with no problems whatsoever.