Credit Cards

#1

Credit Cards: Over 90% of my payments are via credit card due to the frequent flyer points earned yet it appears that I can only set up a credit card account as if it was a bank account, albeit a negative balance.

I note from an earlier topic the observation that isn’t a credit card a sort of bank account. Well No, Accounting conventions/standards requires that positive or negative balances be shown as either Assets of Liabilities. e.g. an overdraft account needs to be reported as a current liability and not as either 1) a negative asset or 2) an offset against other positive bank accounts.

Couldn’t a credit card module be provided? It would be an exact replicate of the bank account module except it would be located/allocated as a current liability instead of a current asset. Surely not be a huge task - investment.

#2

Don’t forget that standard accounting often includes contra accounts. For example, a capital asset account is frequently offset by an accumulated depreciation account, both being reported on the balance sheet as asset accounts.

#3

Depreciation is included with Fixed Assets because its not a Liability. Balance Sheet Liability accounts lists what a business owes to third parties, be it suppliers employees banks etc. Business don’t owe Depreciation to any one, it is purely an arbitrary estimate of the Fixed Assets current value. Same thing applies to the write down of Goodwill. All other provision type accounts, annual leave etc, are calculated on an actual future liability.

With the exception of depreciation the Accounting Standards requires that all Balance Sheet accounts with a negative balance be report as Liabilities, no contra is permitted. This is known as full disclosure, but not probably relevant to the majority of Manger users.

#4

Once again, I am in complete agreement with you on technical grounds. A credit card balance owed is, of course, a current liability rather than a bank account. And I certainly support the addition of a Credit Cards tab to Manager, with functionality as you describe. My focus has been to help inexperienced newcomers, for whom treating a credit card as a bank account is simple and provides the benefits of using the uncleared deposits/payments features. I don’t find this a terrible violation of accounting standards, so long as the bill is paid in full when presented. I’ve recommended to several users that they treat credit card balances as liabilities if they don’t pay them off immediately.

I’m sure you are right: this isn’t very relevant to most Manager users.

That said, welcome to the forum. You will find many users are complete accounting novices (not that I’m that experienced), and many of their questions have little to do with the actual program. I am always glad to see more experienced users contributing their knowledge and helping others out. :smiley:

#5

This is going to be solved with upcoming custom control accounts module. This will allow you to create credit card account under Bank accounts tab yet assign it liability control account under balance sheet.

For now, just have the credit card under Bank accounts tab. It will be easy to show it under liabilities sometime this month.

#6

Thank you for your update, but why do the credit cards have to be mixed in with the banks accounts. Currently there is a Bank Account Tab, this existing program code could be duplicate to become a Credit Card Tab. All functionally remains exactly the same for both, except that the Bank Account Tab goes to the BS Assets and the Credit Card Tab goes to the BS Liabilities.

Alternatively, if its to be a mixed Bank/Credit Card Tab why not extend the ability to assign liability to Bank Accounts. This way Overdraft/Flexi Loan type bank accounts can also be assign as liabilities for balance sheet purposes. Also, if their Debit/Credit balance changes between Balance Sheet periods this can be reflected by their assigned status.

Unfortunately, the Manager’s use of Balance Sheet Control Accounts, rather then Balance Sheet Sub-Total Accounts may limit this flexibility unless you can create both a Bank Account Asset Control Account and a Bank Account Liability Control Account.

Anyhow, what ever you provide right now will be a step in the right direction in separating the reporting of bank and credit card accounts.

#7

Custom control accounts are going to allow just this.

Yep, you will be able to create custom control account, name it anything you like and place it anywhere you want.

#8

Sounds absolutely fabulous, now for the next wish list item …

#9

Has there been an update for the custom control accounts module released yet? I’m having a difficult time managing a corporate credit card.

#10

You don’t need custom control accounts to handle credit cards. Just treat them like bank accounts.

Previous discussion in this thread centered on making them liability accounts instead of asset accounts, since they are usually negative.

#11

I don’t see Credit Card / Liability accounts, has that been released and I just don’t see it? Thanks~!

#12

You are looking at very, very old forum posts. Read the current Guide:

#13

I agree, just use the Credit Card as any normal bank account and transfers between your business account and credit card both go to an account called “Contras/offsets/transfers”.

If you are running a corporation and the credit card is in your personal name, then try to obtain a business credit card, if this cannot be done, pass a special resolution to cover this 'On-Lend Arrangement" which recognized the Credit Card as belonging to the corporation on the same terms and conditions. This should cover that fees and interest are accepted as tax deductible to the corporation - but consult your local CPA.

#14

This is entirely unnecessary. Once the credit card has been set up as a cash account, as described in the linked Guide above, use the Transfer Money feature between the two accounts. No other temporary or clearing account is necessary. The fact that the two cash accounts involved (the credit card and some other bank account) may be at different institutions is immaterial. If they are, fine; you may be able to pay the credit card by a direct, internal transfer. If not, write a check; the Transfer Money function allows you to show both in incoming and outgoing halves of the transfer as pending until the check clears.

As for using personal credit cards for corporate expenses, use Expense Claims. See the Guide below:

#15

If you are using Import Bank Statement & Bank Rules to process the “transfer” then the Transfer Money feature is not available as the “transfer” must go through a Transaction Clearing account as you are separately processing the Spend Money for one account and the Receive Money for the other account

#16

That’s true if you want to clear the imported statement in one step. Another alternative is to delete transfers from the import(s) and enter them directly as transfers, which would probably have been easier to do at the time the transaction occurred.

But we’ve already wandered far from @samm’s question about whether a Credit Cards/Liability tab had been added.

I am going to close this particular topic, because so much of it is obsolete.

#17