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Credit card as bank account, what about cash flow report


#1

I have recently stopped using a liability account for my credit card. In setting up the credit card as a bank account I have noticed that all transactions show up in cash flow immediately. My expectations for the credit card and cash flow is that the change in cash should be recorded when the negative asset balance is paid by another bank account. Is there any way to make the credit card “bank account” act the way I want in cash summary report?


#2

Not really. First, the Cash Summary report is not truly a cash flow statement as accountants typically think of one. Similar, but not identical.

Second, although a credit card is not really a bank account, it is quite advantageous to treat it like one in Manager because of the ability to record payments as uncleared/cleared. And doing so gives a better picture of what monies are actually available to spend. Technically, of course, a credit card purchase is a short-term loan. So if you plan on making minimum payments and stringing out repayment of that debt, you should probably leave the card as a liability account. But if you use the card for its convenience and plan to pay the statement off immediately, a card transaction is more like a check that hasn’t yet been presented for clearing. In such a case, treating the transaction as though the money has already left the company in the cash summary seems more logical.

The choice is yours.


#3

@Tut thanks for the clarification. As you say the choice is mine. I will continue to use the bank account features for a credit card, mostly for the reconciliation functionality (cleared/uncleared) as that is more useful for me now than a clash flow statement that records credit card purchases in the month they are paid rather than the month they are spent.

@lubos if you have any plans for providing this functionality in the near future (liabilities with reconciliation perhaps) , let us know.


#4

When I implement proper cash-flow statement, it will still include transactions from credit cards. Why? Because even transactions financed by bank credit are still cash transactions and are to be included.