I have two credit cards that I need to import.
The one is importing transactions such as buying food with a negative amount and money paid into the credit card has a positive amount. So when I do the bank rules, I am recording payments for each transaction.
The other credit card, which only supports csv import seems to be doing it the other way around where buying food on the card is a positive amount and paying back the credit card is a negative amount. However, bank imports are recording all transactions such as grocery shopping as receipts not payments.
Before I import all the credit cards, I just wanted to make sure that when you spend on the credit card that it should be recorded as a negative amount and the transactions for suppliers should then be payments. That sounds right as it will be a negative amount for bank and a positive amount for credit card payment when paying the credit card bill.
Within your accounting records, a purchase made by credit card is a credit, just like payments made from any other bank or cash account. You should use a payment form to record the purchase, because that is what you did. The offsetting debit is posted to whatever expense account is appropriate for the purchase. Normally, a credit card is set up as a liability account, so the credit increases its balance. (If you set it up as a contra asset account, the credit will decrease the balance.)
When you pay the card processor after receiving your statement, that includes a credit to your bank account, which decreases its balance, and a debit to the credit card account, moving it back towards zero (assuming you set the card up as a liability account).
That’s basic accounting. But how the bank and/or credit card processor report transactions to you is a completely separate matter. Often, a bank will report from its own perspective, so your payment of the statement (which was a credit to you) is a debit for the bank. But the bank might also think it is being more customer friendly by reversing the signs. You have no control over that and must exercise caution when importing statements to be sure the transactions match the conventions used in your own system.
Whatever you do, do not reverse the use of receipts and payments! Your records must reflect what you did, not how the bank reported. That may mean that for one of your cards you must reverse signs of all transactions before importing the file so things come out correctly in Manager.
I forgot to mention that I had setup the credit cards as bank accounts (assets), not as liabilities. The main reason being was so that I could import the transactions.
Ok, I will change the second card so that purchases on the card are negative and any money paid into the account is positive. This is what I thought it should be. When I credit my bank account with a payment, it should debit the credit card which should bring the negative amount back up to zero. Thank you Tut.
I already addressed that. When you set up a credit card, you always do it as a bank account. You have done it as a contra account (where the sign of the balance is opposite of normal asset accounts). To make it a liability account, just edit the group it is reported under. This is a matter of preference. It will not change how figures appear in the tab listing.
Oh I see, you set it up as a bank account, so you can import the statements. But it doesn’t have to be under assets. You can have it showing under liabilities instead of assets.
I think I will keep it under bank accounts in assets, so it’s easier to see bank and credit in one section.