CenterPoint^® Fund Accounting - Using Credit Cards to Pay for Purchases

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Credit Card Purchases Video - Duration: 3 min 09 sec

Credit Card Types Video - Duration: 2 min 48 sec

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This document describes the two options that can be used if your business uses credit cards to purchase items for your business.

The first option is to use a line of credit account to track credit card purchases. The Line of Credit account works just like a bank account, allowing credit card purchases to be entered as payments, existing invoices to be paid with the credit card, and you can reconcile your statement in Bank Reconciliation. The balance in the credit card Line of Credit account represents the amount owed.

The second option is to create a credit card account that acts like an accounts payable account. Credit card purchases are entered on the Vendor Invoice screen. Each purchase is entered to the vendor where it was made, but the invoice is created for the credit card vendor. This allows you to easily see all the outstanding invoices that make up the credit card balance.

Option 1: Credit Card Setup as Line of Credit

One-Time Setup

Paying for Goods at the Time of Purchases with a Credit Card

Paying Open Invoices with a Credit Card

Reconciling Credit Card Transactions (Optional)

Paying a Credit Card Balance

Option 2: Using Invoices for Credit Card Purchases

One-Time Setup

Making Purchases with a Credit Card

Paying the Credit Card Company

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Option 1: Credit Card Setup as Line of Credit

Note: This is the only option that allows you to reconcile your statement in Bank Reconciliation

One Time Setup

CenterPoint needs a credit card account in the Line of Credit account category setup to purchase goods through payment transactions using a credit card and when paying Accounts Payable invoices.

1. Select Setup > Accounts > Accounts to begin entering an account for the credit card in the Line of Credit account category. Click New.
2. Enter an Abbreviation and Number if they are being used in this database.

3. Enter the name of the Credit Card (Visa LOC for example) in the Name field.
4. In the Type box, select Liabilities.
5. In the Category box, select Line of Credit.
6. Select the Detail tab.

7. On the Detail tab, enter the bank/business who issued the credit card (who you pay the credit card bill to) in the Lender field. 

8. Click Save.
9. Repeat Steps 1-8 for all credit cards you will use to purchase goods or pay Accounts Payable invoices with.

Paying for Goods at the Time of Purchases with a Credit Card

1. Click on Processes > Purchases > Payments to begin entering a transaction for the items purchased.
2. In the Bank Account box, select the credit card account you are using to purchase the goods with, for example Visa LOC (created in Step A).
3. In the Pay to the Order Of box, select or enter the business where the purchase was made.

4. Enter all of the pertinent information (amounts, notations, accounts, etc.) to record the purchase.

5. Click Save to complete the purchase. When the transaction is saved, the following will occur:

• The purchase for the vendor is recorded as a payment
• The balance on the account associated with this credit card is increased.

Paying Open Invoices with a Credit Card

Vendor invoices entered to an Accounts Payable account can be paid from either Payments vendor by vendor or from Pay Invoices Due for multiple vendor invoices.

To pay vendor invoices vendor by vendor:

• Select Processes > Purchases > Payments.
• In the Bank Account box, select the credit card in the Line of Credit Account Category.
• In the Pay to the Order of box, select the vendor you are paying an open invoice with a credit card for.
• Enter the Amount you are paying towards an open invoice with a credit card.
• Click the Apply to Open Invoices button.
• Select the Pay check box for the invoice(s) you wish to pay. Click OK.
• The Accounts Payable account is automatically entered into the Account column, which will decrease the liability.

• Click Save.

To pay multiple vendor invoices:

• Select Purchases > Payments > Pay Invoices Due.
• In the Bank Account box, select the credit card in the Line of Credit Account Category.
• Enter the Filter and other information necessary for searching for open invoices.

• Select the Pay check box for the invoice(s) you wish to pay.
• Click Close.

Reconciling Credit Card Transactions (Optional)

Credit card transactions can be reconciled in Processes > Banking > Bank Reconciliation. Credit card payments entered in Processes > Purchases > Payments with a credit card account in the Line of Credit account category will display in the Checks and Payments grid on the Reconcile tab. All increases to the account are displayed as positive numbers and all decreases as negative numbers. Credit card interest charges can be entered on the Fees & Interest tab.

Paying a Credit Card Balance

1. Click on Processes > Purchases > Payments to begin entering a transaction for the payment of a credit card balance.
2. In the Bank Account box, select the cash account you are using to pay the credit card balance.
3. In the Vendor box, select the credit card company you are paying the balance for.
4. In the Account box, select the credit card account assigned to the line of credit account category, for example Visa LOC.
5. In the Amount box, enter the amount to be paid to the Vendor.

6. Click Save.

Option 2: Using Invoices for Credit Card Purchases

One-Time Setup

CenterPoint needs an account and a vendor setup to track the credit card purchases and balances. When a credit card is used to pay for a purchase, the system will automatically increase the Account balance and create an A/P Invoice for the company that issued the credit card.

1. Select Setup > Accounts > Accounts to begin entering an account for the credit card. Click New.
2. Enter an Abbreviation and Number if they are being used in this database.

3. Enter the name of the Credit Card (First Bank Visa for example) in the Name field.
4. In the Type box, select Liabilities.
5. In the Category box, select Credit Cards Payable.
6. Select the Detail tab.

7. On the Detail tab, enter the bank/business who issued the credit card (who you pay the credit card bill to) in the Vendor Liability is Paid to box. 

8. The Card Number, Security Key and Expiration Date fields are optional.
9. Click Save.

Making Purchases with a Credit Card

1. Click on Processes > Purchases > Vendor Invoices (A/P) to begin entering a transaction for the items purchased.
2. In the Vendor (Vendor Invoices (A/P) box, select the business where the purchase was made.

3. Enter all of the pertinent information (amounts, notations, accounts, etc.) to record the purchase.
4. In the AP Account box, select the Credit Card that was used to pay for this purchase. The Credit Card Balance will be displayed on the right.
5. Select the On Hold check box if you do not want this invoice available to be selected for payment. Invoices can be placed on hold if you do not want the invoice selected for payment in the Payments or Pay Invoices Due screens (for example, the quantity has been received, but was at a higher cost than was originally quoted and you don't want the accounts payable department to accidentally pay this invoice until your dispute has been resolved or you only received partial shipment and your policy is not to pay invoices until an entire shipment is received). Held invoices are not added to the vendor balance and display on the Open Invoice Report. The On Hold Status of a held invoice must be changed (using the Processes > Purchases > Place Invoices On Hold button) to reactivate it .

6. Click Save to complete the purchase. When the transaction is saved, the following will occur:

• The purchase for the vendor is recorded as a paid invoice
• The balance on the Account associated with this credit card is increased
• An unpaid A/P invoice is created for the credit card company.

Paying the Credit Card Company

When a credit card is used to pay for a purchase, the system automatically creates a A/P Invoice for the company that issued you the credit card. These invoices are available to pay with all other A/P invoices in Pay Invoices Due and in Payments.The normal Processes > Purchases > Pay Invoices Due and Processes > Purchases > Payments can be used to pay the amount owed to the credit card company. For step-by-step instructions on paying invoices due, see the Pay Invoices Due or Pay Invoices Due with Review Process documents.

Document: 3091

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