In this article, learn how to categorize credit card payments in QuickBooks.
A well-written transaction report is something you will not have to dig much to know what is what. Just go through it once, and you will get an idea of various expense categories. Are you thinking, is it possible? Yes, it is by using the QuickBooks categorization feature.
Categorizing your credit card payment in QuickBooks helps better manage your expenses. This feature in QuickBooks categorizes your expenses when you incur them for the first time, and subsequently, it automatically ranks the exact nature of expenses with the same details.
Categorizing your credit card transactions helps in proper business management. Moreover, it becomes easy for you to make an analysis of and apply all measures for the optimization of your expenses.
Read Also: How to Apply Credit Memo in QuickBooks
Steps to Categorize Credit Card Payments in QuickBooks
All you have to do is go through the transactions and then add them to the account where you want them to reflect in QuickBooks. But first, you have to link your account to bank feeds in QuickBooks. Then all downloaded payments appear in the Review tab, where you can categorize them into their respective categories.
Follow the below-given steps properly to categorize credit card payments in QuickBooks.
- First, open QuickBooks and click the “Banking” option present in the left menu bar.
- You are now redirected to a page where all of your linked accounts are reflected, such as your checking account, credit card account and saving bank account. Now click on the Review tab.
- Those transactions that appear on the review tab are not in QuickBooks yet. Therefore, you have to categorize them first. For this, you have to click on every expense that has been incurred through your credit card.
- Now you have to fill in details such as Vendor or consumer name, expense category, billable, project name etc. In addition, you can also add any custom label in your tag box to keep track of your expenses and the memo number.
- After filling in all details, click on the option “add”. Now QuickBooks will recognize all credit card payments with the exact details and accordingly categorizes them.
FAQs on Quickbooks Credit Card Payments Categorization
How to Reconcile the Credit Card Account in QuickBooks?
You can initiate the process by choosing your credit card and clicking on the credit card you want to reconcile. Now select the date of the statement and give your finance charges and ending balance. Once you enter all details and match transactions, click on reconcile your account and save.
What Kind of Expenditure is Credit Card Payment?
A payment that is made against a card balance is making payment against the credit card kind of liability account.
Is it ok to Exclude Credit Card Payments in QuickBooks?
No, never exclude credit card payments. Even if this option exists in QuickBooks, you should not exclude those transactions imported from the credit card account. All marketing should be recorded in QuickBooks for your credit card account to get reconciled.
Reconciling your credit cards regularly and categorizing your credit card payments helps ensure that all of your records are perfectly managed and there is no inaccuracy. Follow all the steps very carefully and categorize your credit card payments in Quickbooks without any hassle.