Re: Credit Card Accounting

[..hidden..]

May I add...


>> 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.


Both. Items over certain dollar amount and "regular" vendors we put in
spearate accounts. "Small" purchases we just aggregate and enter in the
note field the vendor names and the purchases.


>
> 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.

You have to audit the statement and should use employee expense report.

>
>>  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.

Just setup your CC account for payment like you would with the bank account.

>
>>
>> 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.


We had setup an expense account to pay the CC bill each month, then
afterward we would do a journal entry to offset the liability and expense
account (because we used to print checks for payment). Now that we pay
online we basically just do a journal entry to pay down the liability
account from our checking account. It's just easier and no need to setup a
vendor in the latter case...

My $0.02.

Tim