looking through this issue I realized you could get a nice solution by simply adding a new tab for creditcards with the same exact content of Bank Accounts thus having the chance to import CSV statement files, but not adding to the final “Cash at bank” table in the Summary tab.
This because creditcards get deducted in the bank statement monthly automatically and if we simply use the CC stamenets as Bank accounts the numbers of the Cash at bank is wrong (you would have double deduction from the CC accounts and the deduction in the main bank accounts.
I would use the same for Cash Accounts but now they do not allow for automatic statement import.
This way you could also go through the CC statement and be able to sort the billable expenses and add them to the proper tab.
I am not sure why you don’t want credit cards reflected in the Cash at bank balance in the Summary. The money for a credit card purchase has been obligated. In that way, it is exactly like an outstanding payment by check that has not cleared. Where else would credit card transactions go? They cannot simply be held in abeyance.
In this, are you referring to a debit card? If a card is automatically deducted from a bank account, it is like taking cash directly out of the account. From an accounting perspective, it would be incorrect to record such a transaction anywhere but in the corresponding bank account.
They should not. Cash Accounts tab is meant for literal cash–physical money, such as a till or cashbox. Statements are not generated for such accounts. Instead, we track them in our accounting books and verify presence of the physical cash by periodic audits.
thanks for quick reply, I need to clarify better :
we have automatic Credit card deduction at end of the month. This is different that debit cards where amount is deducted instantly. Rather the total is automatically deducted at the end of the month.
in this sense, our Bank account DOES record of the credit card deduction. this is specifically why I end up with a DOUBLE deduction if I have the credit cards as “bank accounts”. The amount would be deducted twice from the total “Cash at bank” amount (from the credit card and from the bank deduction record).
You are correct in that I do not want to use the Cash Accounts as they are not correct for this use. But they offer the possibility of not showing up in the main “Cash at bank” balance.
Credit cards tab should be for the sole purpose of downloading and managing CC statements and extract billable expenses from them.
I understand now, @chowluca. What you have is like a typical credit card, but with the convenience (or requirement) of automatic account payment without your involvement. I suppose at times that is nice, but could also cause you some worry in months where cash flow is tight.
So the problem you describe is similar to that of other Manager users who record their transactions as they happen and import their bank statements. You end up with duplicate entries. The solution is to do one or the other, but not both. While I do not know your exact work flow, I cannot see why this should not work either way.
Personally, I do not import statements for this reason. I tried it, but found it to be too much trouble. I also don’t like to wait an entire month to see my financial position. But I have relatively few bank transactions, seldom more than 10 in a month. I suppose the situation is different for someone with many transactions.
situation is exactly as you say - we indeed cannot record individual transactions as we might end up with 40-50 transactions every month which might include several items as billable expenses while others might not be.
we have by now resolved to import trabsactions (with the aim of sorting billable expenses) AND delete the actual monthly automatic account payment. this we must do because Manager treats billable expenses as “derived” from the bank account statement.
Again I would recommend to have a simple tab called credit card, with the functionality of a simple bank account tab, but not adding in the main balance.
in the database would simply result in adding a tab with same coding as bank account , called Credit cards, and showing up separately in main summary.
That’s it.
I hope this is not too much trouble and would serve a lot.
If credit card gets paid in full at the end of the month from main bank account, then you don’t have to create credit card account in Manager at all. Simply split the payment to credit card such as the amounts are assigned proportionally to expense categories.
The other option is to simply treat credit card as if it’s regular bank account. There is nothing in Manager to implement as Manager supports both workflows well.
What @lubos is suggesting is that when you make the payment to pay off the credit card statement, you allocate the amount paid to multiple accounts. For example:
Total statement amount is: 1,000.00
Allocate to travel expenses: 350.00 for airline ticket on the statement
Allocate to office expenses: 150.00 for stationery purchased with credit card
Allocate to billable expenses: 200.00 for printing of reports on behalf of a customer
Allocate to meals and entertainment: 300.00 for dinner for customer
Do this in the Spend Money screen by using the Add Line button.
The simple solution here is to use a clearing account as that eliminates the duplication.
Your bank account payment is debited and the clearing account is credited,
Your credit card receipt is credited and the clearing account is debited.
You could utilise the existing suspense account and bank rules so that you can continue to use import statements
Why do you suggest a clearing account, @Brucanna? That seems like an unnecessary step.
@chowluca, accounts are created under settings in the Chart of Accounts. You can create any account you like, name it as you choose, and designate its type. But before you do that, let’s wait for @Brucanna’s explanation of why this might be necessary.
Your automatic payment from the bank account and deposit to the credit card appears to be a simple enough single transaction, but in reality it is actually two separate transactions due to the double entry nature of accounting.
Transaction 1) Payment from the Bank - Credit bank and debit contra account - in this case Credit Card
Transaction 2) Deposit to the Credit Card - Debit Credit Card and credit contra account - in this case Bank
Hence the duplication - Bank x2 credits and Credit Card x2 debits. Therefore, by placing the debit and credit contra entries in to a clearing account they cancel themselves and the Bank & Credit Card only receive one entry each.
The “Clearing Account” should be a Balance Sheet account - allocated to current assets or current liabilities, it doesn’t matter as at most times it will have a balance of zero. Ignore my previous comment about using the Manager’s Suspense account as it appears to be a hidden internal system account not selectable from the Chart of Accounts.
However, having said all that it appears that Manager has an even simpler way,
When you go to make a bank account entry you have three options 1) Receive Money, 2) Spend Money and (whippy) 3) Transfer Money. This Transfer Money will do exactly what you wish to do without the duplication, but don’t know if you can make a Bank Rule using Transfer Money.
I wouldn’t be in favour of the above suggestion regarding a single Back Account entry with multi line entries covering the various credit card expenses for the month:
All your credit card transactions wouldn’t be in the one location but spread over multiple entries though out the Bank account, therefore searching for an item could be tedious unless you could recall either the date or the contra account it was posted to.
Posting off the statement means that your BS and P&L aren’t updated until after its arrival. Posting individual items as they occur, either daily or weekly keeps the management of your business more concurrent.
Summarising your credit card items (e.g. all petrol purchases) to shorten the bank account entry defeats the purpose of having a computerised accounting system as a) you have to spend time creating a separate listing/spreadsheet and b) you can’t drill down to find a particular item without going back to the source document.
If your credit card statement date is around the 14th onwards then you are into the last half of the current month before you have completed the previous month and the summarising of your credit card items would need to be split into two, covering each months which would also mean separate bank account entries if you want the months P&L to read the correct monthly profit/loss.
Lastly, clearing accounts can have lots of practical uses but that’s another topic
Sorry for being so long winded
Have responded but are unsure how to link in multiple forum members.
Also, if you go to the end of the topic “credit cards” you will see details of new proposed developments. Apologies if you have already read them
This is what I was referring to as a single-step approach. The same thing could be done with a journal entry, debiting credit card and crediting bank account, except that Manager does not allow bank transactions in the Journal Entries module.
As to your concerns about multi-line entries:
This would not be true, because there would be a single entry in the bank account ledger. The multiple entries would be distributed over the various expense accounts. This would be equivalent to multiple debit entries, but a single credit entry. Of course, the Transfer Money approach is still easier.
I completely agree with you on this. My purpose was not to advocate waiting until the statement is received to post expenses, only to explain how it could be done.
Again, I agree.
This is the same reason I do not like importing bank statements. You could be 30 out of date on your financial position, plenty of time to make poorly informed decisions.
Whether you respond with the general Reply button or respond to the individual forum member, your posting is viewable by all. Members who have participated will be notified, assuming their preferences are set that way (which is the default). Only if you initiate a private message is your response hidden. You can specifically call a member’s attention to a topic with the Invite button.
Sorry, but the same thing can’t be done and should never be done by Journal Entry. Manager is extremely correct by preventing such entries. It would almost be impossible to reconcile a bank statement and bank account if they were permitted due to the simple fact that the bank statement could never list such entries as they aren’t a deposit or payment.
You wrote “This would not be true, because there would be a single entry in the bank account ledger. The multiple entries would be distributed over the various expense accounts”. That is for the entry itself, but my point was regarding the searching for a past transaction after multiple months - you would need to know the correct month to locate the transaction.
With regards to the forum the FAQ is not functioning either off the 3 bar symbol or off the About Page. So far I haven’t stumbled across an Invite Button but that doesn’t mean that its not there, I just a first timer forum user. Anyhow, this should a separate topic as its unrelated to the topic heading
Actually, they would be if you do this from the Spend Money or Receive Money functions. In the bank account ledger, the full amount of the credit would show, too. Only in the expense account ledgers would the partial amounts be shown. Remember, however, that I do not advocate this method even though it would work. I support your approach of recording individual transactions as they occur.
This is not necessary. The Search function will search entire records for any text string you enter into the search field. So a portion of the description, the date, the payee, or the amount would all return records that contain those things.
Invite button is underneath the last post in a topic, along with bookmark, share, flag, and reply.
Sorry again but you are mixing subjects and confusing Bank Accounts and Statements:
You originally wrote: “The same thing could be done with a journal entry, debiting credit card and crediting bank account, except that Manager does not allow bank transactions in the Journal Entries module.”
Which I responded: “the same thing can’t be done and should never be done by Journal Entry. Manager is extremely correct by preventing such entries.” and "bank statement could never list such entries "
Bank Statements, the bank’s document, can’t list journal entries as 1) they are not a deposit or payment and 2) the bank would have no knowledge of their creation.
Hence Manager forbids correctly any General Journal creation in relation to bank accounts which would also include credit card accounts.
The Search function: Thanks for that, as I haven’t yet posted a single Manager entry the need hasn’t arisen yet
You wrote: “Invite button is underneath the last post in a topic, along with bookmark, share, flag, and reply” While I have the bookmark, share, flag, and reply buttons, with Tracking beneath, I don’t have the Invite.
My mistake. I forgot that the privilege of inviting other forum members into a topic comes at a higher level of membership, which is granted automatically after a fixed number of posts/responses/reads or whatever. I forget the exact criteria, but at your rate of contribution, I think you will soon be there.
