How to Use Your Credit Card for Bill Payments

How to Use Your Credit Card for Bill Payments

If you use a credit card to pay your suppliers, you need to set up a bank account for the credit card, apply the correct settings, and make sure you use that bank account when you pay a supplier with that credit card.

Setup Steps

  • Create a Liabilities Chart of Account Code
  • Create the Bank Account for the Credit Card
  • Use the Credit Card Bank Account when paying with the credit card
  • Transfer from Checking Account to Credit Card Account when you pay the bill

Create Chart OF Account Code

The first step is to create a chart of account code to use with the credit card bank account. The account code needs to be a from the “Liabilities” Group, the “Current Liabilities” Sub Group, and the “Accounts Payable” Account Type.

To create the Chart of Account Code, do the following:

  1. Go to Accounting Module > Accounts > New Account CodeThe “Chart of Accounts” wizard will display.
  2. If you do not use segmented accounts, click on the Next button three times.
  3. Enter an “Account Code”, enter “Accounts Payable – Credit Card” for the description, enter “Liabilities” for Group, “Current Liabilities” for Sub Group, and “Accounts Payable” for Account Type.
  4. Click to check the “Bank/Petty Cash Account” (this box must be checked).
  5. Click on “Next” until you see “Finished” and then click on “Finished”.

Create a Credit Card Bank Account

The second step is to create a Bank Account for the credit card. Create the bank account the normal way except, use the account code you created in step one as the “Account Code”.

Pay with the Credit Card Bank Account

Every time you pay a supplier with the credit card, make sure to use the “Credit Card” Bank you created. There is a drop-down for the bank account in the upper left corner of the payment screen.

Use a Bank Transfer to Pay Credit Card Balance

Every time you pay your credit card bill, make a banking transfer from the checking account to the credit card account.

 

Applicable Products

All Connected Business Versions

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