Credit Card Payments in A/P

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1 Credit Card Payments in A/P Overview The best way to handle payment Demand/Hand Checks function. of invoices with a credit card is to use the Accounts Payable There are several setup steps required before a credit card payment can be created. There are two methods for posting this type of transaction, which will be covered later: Method A The invoice was posted in A/P at the time the charge was incurred, and later needs to be marked paid with a credit card. Method B The invoice and credit card payment are posted at the same time. I. Setup 1. Create a G/L account for the credit card payments, in lieu of a Cash account. This will operate as a clearing account. Navigate to: General Ledger>Maintenance>General>Chart of Accounts Press Add to insert a new record. Page 1 of 12

2 Enter the G/L account information and press <F2> to save. 2. Create a Bank Checks file for the credit card account. Navigate to: System Tables>Bank Accounts Click Add to create a new Bank Checks file. Page 2 of 12

3 Since this account is essentially a holding account, the Bank Account number can be any numeric code. (In the above example the account number is all nines with the last four digits of the credit card number.) If the Bank Reconciliation application is installed, the (Use in Bank Rec?) field should not be checked off, as there will not be any bank transactions to reconcile. You will also need to check the box for Use Report Builder if a report builder check is used to process a demand/hand check and then click Save. Enter the required information (as seen in the example above) and click Save. On the GL Accounts tab, press Add, and enter the G/L account that was created in step 1. Click Save. Page 3 of 12

4 3. Set up a credit card vendor. Navigate to: Accounts Payable> >File Maintenance>File Maintenance/Lists>Vendors If the vendor already exists, select it and enter the new G/L account created in step 1 of Setup as the default Expense Account. Click New to create a new vendor. The fields that must be completed to save the vendor are Vendor Name and Terms. Enter the new G/L account created in step 1 of Setup as the default Expense Account. Click Save. Page 4 of 12

5 Entering Transactions There are two methods for recording credit card charges and payments: Method A Method B The invoice was posted in A/P at the time the charge was incurred, and needs to be marked paid with a credit card. The invoice and credi+t card payment can be posted at the same time. Method A Post the invoice and payment separately. If the invoice has already been posted, skip to the Payment section. Invoice Entry Go to: Accounts Payable>Transactions>Invoices>A/P Invoices>Data Entry Enter the invoice (or credit card receipt for the purchase) just as any invoice would be entered. NOTE: Entering a C in the Source field makes it easier to identify credit card purchases in the G/L reports. Page 5 of 12

6 Invoice Edit List Go to: Accounts Payable>Transactions>Invoices>A/P Invoices>Edit List Run the Edit List, which will display any warnings or errors. If the Edit List is error-free, the batch can be posted. Invoice Post Go to: Accounts Payable>Transactions>Invoices>A/P Invoices>Post NOTE: Posting the invoice will debit the Expense account and credit the A/P Trade account. Payment Entry Go to: Accounts Payable>Transactions>Checks/EFT>Demand/Hand Checks>Data Entry Enter a Hand check to record the credit card payment of the invoice. In the Cash Account field enter/ /select the G/L account that was set up in the Bank Checks file for the credit card account, in Step 2 of Setup. Page 6 of 12

7 Select No in the Print Checks? field, as there is no check to print. If Automatic Check Numbering is enabled, a window similar to the following will pop up. Select No. As there is no check, the Check No. field can be any numerical value. One suggestion is to use the date as the check number and add a suffix for the payment type, as seen in the above example. If there is more than one transaction on that date, the transaction number could be added to the beginning or end of the date. Press <F2> and select the invoice being paid. Page 7 of 12

8 Click Continue. Demand/Hand Checks Edit List Go to: Accounts Payable>Transactions>Checks/EFT>Demand/Hand Checks>Edit List Run the Edit List, which will display any warnings or errors. If the Edit List is error-free, the batch can be posted. Demand/Hand Checks Post Go to Accounts Payable>Transactions>Checks/EFT>Demand/Hand Checks>Post NOTE: Posting the payment account. will debit the A/P Trade account and credit the clearing Page 8 of 12

9 Method B The second option is to enter the invoice and payment at the same time using the Demand/Hand Checks function, which effectively combines the two steps in Method A. Go to: Accounts Payable>Transactions>Checks/EFT>Demand/Hand Checks>Data Entry In the Cash Account field enter/ /select the Clearing G/L account that was set in the Bank Checks file in Step 2 of Setup. Select No in the Print Checks? field, as there is no check to print. If Automatic Check Numbering is enabled, a window similar to the following will pop up. Select No. Page 9 of 12

10 As there is no check, the Check No. field can be any numerical value. One suggestion is to use the date as the check number and add a suffix for the payment type, as seen in the above example. If there is more than one transaction on that date, the transaction number could be added to the beginning or end of the date. Press <F2> and click Continue in the Invoice Selection screen to enter the invoice. Page 10 of 12

11 Enter the invoice number and press <Enter>. The system will verify that the invoice has not previously been posted. Enter the remaining invoice information. NOTE: Entering a C in the Invoice Source field makes it easier to identify credit card purchases in the G/L reports. Press <F2> twice. Enter the account distribution(s) for the invoice. Press <F2> to save. Page 11 of 12

12 Demand/Hand Checks Edit List Go to: Accounts Payable>Transactions>Invoices>A/P Invoices>Edit List Demand/Hand Checks Post Go to: Accounts Payable>Transactions>Invoices>A/P Invoices>Post NOTE: Posting the invoice and payment will debit the Expense account, debit and credit the A/P Trade account, and credit the clearing account. II. Pay the Credit Card Statement When the credit card statement is received, enter it as an invoice, paying the vendor that was set up in Step 3 of Setup. NOTE: Posting the invoice for the credit card statement will debit the clearing account and credit the A/P Trade account. The following illustrates the G/L postings created for this process. Expense A/P Trade Dr Cr Dr Cr Inv Inv Pmt CC Stmt Pmt Inv CC Stmt Inv Clearing Account Cash Dr CC Stmt Inv Cr Dr Cr Inv Pmt CC Stmt Pmt If there are any further inquiries, department. please refer to our website or contact the Data Plus Support Website Data Plus Support Ext 3 support@dphs.com Page 12 of 12