I’m finding the way credit cards are handled in Manager to be confusing. I have an existing balance on my business credit card. I created a liability account and entered my starting balance for that credit card. Now, when I go to charge one of my expenses to that credit card, I find I cannot assign it to that credit card liability account. Reviewing the guides and looking at the forum, I see I need to create a bank account for the credit card. I get the reasoning around this although it is not how I have done it in the past (QB). I have created this.
But, the guides indicate I then need to create a “custom control account” for this on the liability side. I do not understand this concept.
Why cannot I assign the credit card liability account, with existing balance, as the control account?
If “because” is the answer to question number 1, how do you assign an existing balance to the control account to properly track the balance for the credit card?
@Ealfardan Thanks for your response. You are repeating what I see in the guidelines as I outlined in my initial paragraph (admittedly I was long winded!). But, it does not resolve my existing balance question. I have an existing balance. I suppose I could do an inter transfer to move the control account liability to the existing liability. It seems like a lot of unnecessary extra work for no reason that I can see.
To transfer the balance, it depends on the sign of the balance:
If you have a credit balance (overdrawn), create a Payment, select your newly created account as your Paid from account and select the old liability account in the lines.
If you have a debit balance (prepaid), create a Receipt, select your newly created account as your Received In account and select the old liability account in the lines.
If you wanted to reclassify each and every transaction, you might need to delete all previous records and use Import Bank Statements feature.
Is your credit card liability account in the ‘Bank and Cash Accounts’ tab, if it is not, it would be the wrong type of account, and cannot have cash transactions assigned to it, so you would need to delete your existing credit card liability account and create one in ‘Bank and Cash Accounts’.
In Manager there are different types and levels of accounts - not in an accounting sense, but for software purposes. ‘Control Accounts’ are a top-level account which appear on the balance sheet in total and have sub-accounts inside of them, there are types of ‘Control Accounts’ which are linked to many functional tabs (Bank Accounts, Customers (accounts receivable), Suppliers (accounts payable), Fixed Assets, Special Accounts, etc.). So, what you need to do is go to ‘Control Accounts’ in ‘Settings’, and within that to ‘Bank and Cash Account’ and create whatever account you want to appear on the balance sheet for credit cards; under ‘Group’, I would assign it to liabilities, but that is up to you. Now, ‘Control Accounts’ cannot be reconciled at the Control Account level, and cannot have transactions assigned to them, they are effectively a flow through grouping for reporting, so you need to go to the ‘Bank and Cash Accounts’ functional tab on the left side of Manager, click edit on your credit card account, and under ‘Control Account’ select the ‘Control Account’ you just created to assign the credit card account to that control account.
Now, you could choose to not create a control account, Manager has a default Bank and Cash Account on the balance sheet, but then credit cards liabilities will be netted against cash assets, which is probably not preferable.
Thanks again. However, it is not an “overdrawn” account. It is a revolving credit card account. So, you have an existing balance. I pay each month on this and charge items to this. Sometimes I pay it off, sometimes I don’t and it rolls over and has interest expense added to it. I often use this credit card to purchase inventory. Normally, from my perspective, this is an increase in liability with a corresponding increase in assets (inventory purchase).
Thanks. I am just transferring existing balances (end of 2024) and going through my monthly process. What I mean by transfer the balance is the “starting” balance for the credit card. I guess I can just enter it after creating the bank cash account.
Thank you. I think I got it setup correctly now. This is very counter intuitive to me because I have used QB for 20 years and am used to how they do things.