Re: Credit Card Accounting

["Chris Travers" <..hidden..>]

On Thu, Oct 30, 2008 at 9:47 AM, Munroe sollog
<..hidden..> wrote:
> Our company has a credit card, as I am sure most companies do.  I can't
> seem to wrap my head around getting ledger to account for the credit card
> properly.
>
> I created a new ledger 2150 - American express
>
> Now, let's say I have 25 purchases using the credit card over the month I
> need to account for.  Do I add each one of those purchases one at a time in
> the "Vender Transaction" interface?

I would recommend this.  While you could create a generic vendor and
aggregate, there are good reasons not to do so from a financial
accounting perspective.  The big one is that these occur on different
dates and so you could run into issues matching expense with income.

The other is an internal process control issue.  If you are just
entering data on the credit card statement into LedgerSMB, then I have
to wonder how you actually know whether employees are abusing their
use of the card.

>  If I am purchasing inventory I have to
> use the "Vendor Invoice" interface, as there is no way to effect Inventory
> otherwise.

THat is correct.  Once again, you could aggregate, but it is a lot
better over time not to do so.

>
> Furthermore, Paying the invoice using the 2150 account, there is then now
> way to link the payment of my amex card to that same account, or at least
> none that I can tell.  I am probably doing something wrong, and I am sure
> my vocabulary isn't kosher.  Is this easier than I am making it out to be,
> if so can someone enlighten me?

You could set Amex up as a vendor.

However, just entering a GL transaction to pay the bill is probably
better, just like one might do with any other loan.

Best Wishes,
Chris Travers