How am I going to capture those bits and pieces of claims into QuickBooks?
In my previous blog, I did mention that bosses usually had lots of bits and pieces of claims. How are you going to capture these claims into QuickBooks?
I preferred to create the Amount Due account as a Credit Card type of account. This method is easier because I don’t need to create any General Journal entry. Besides, to a layman, it will not be easy to understand the rule of double entry.
Below is an example to illustrate how to use a credit card account to capture the claims.
Create a credit card account
From your chart of accounts list, add a new Credit Card account for yourself. Example:
- Account type: Credit Card
- Account name: Amount due to EHLim
Enter claims
Go to the Banking menu and select Enter Credit Card Charges.
In the Enter Credit Card Charges form:
- Credit Card: select the newly created credit card account “Amount due to EHLim” account.
- Select the “Purchase/Charge” radio button.
- Purchase From: select your supplier’s name, in this example we select “Best Stationery Supplies”.
- Date: your date of purchas
- Ref No.: Supplier’s bill reference number or a Credit Card Transaction number.
- Amount: Enter the amount due for this bill
- Account column: select the expenses account, in this example we select “Stationery and Office Supply” expense account.
- Net Amt.: Enter the net amount for the item purchased.
- Memo: Optional, you can enter short information about this purchase.
- Save this transaction.
Once this Credit Card transaction is being saved, you can view how much the company owes you from the Balance Sheet report.
Credit Cards account is part of the Current Liabilities account. By using Credit Card method, you don’t need to enter bills from supplier then follow by passing a General Journal to Debit Account Payable account and Credit the “Amount Due to Director” account. Besides, this method does capture the original supplier’s name in the supplier field; thus you can view this credit card charge from this supplier at the supplier centre.
Some accountant may prefer to create Amount Due account as an Other Current Liability type of account, but I don’t see any issue if I were to create it as a Credit Card account (it is still under the Current Liability’s classification).