Recording your credit card purchases in Peachtree is easy. But since there isn’t a “Pay With Credit Card” button anywhere, the exact steps may not be obvious to you. And, of course there is more than one way you can go about it.
The simplest method would be to wait until your credit card statement comes in, then record one big invoice for everything on the statement, using the credit card company (Amex, etc.) as the vendor. You can list each transaction as a line item on the invoice, or summarize your purchases by GL account. Paying this invoice would be just like paying any other accounts payable invoice. Go to Tasks – Payments, enter the vendor and select the invoice(s) you want to pay. Just remember to change the amount if you aren’t paying the entire balance. This method is simple, but it has some drawbacks. Since your purchases wouldn’t be entered until the end of the month, you wouldn’t have an accurate picture of your expenses on a daily basis. And if you purchase inventory on a credit card, your inventory would never be up to date. Finally, it would be harder to look up vendor history because transactions would be linked to the credit card vendor, not the vendor you purchased from. But, if those limitations aren’t a problem for you, this method could save you some time.
For most people, the preferred method is to set up a liability account for each credit card (if multiple cards are paid on one statement, they would all use the same liability account). Purchases then get entered just like non-credit card invoice but payments are credited to this liability account instead of cash.
To set up the credit card liability account, go to the Maintain menu and choose Chart Of Accounts. Use a number that comes shortly after your regular accounts payable and name the account something like Visa Payable. Set the account type to Accounts Payable; that will get it in the right place on your balance sheet.
The next step is to set up a vendor for the credit card company. In the Maintain menu, choose Vendors. Set them up as you would any other vendor, but enter the liability account you just created in the Expense Account field.
That is all you need to do for setup. When entering purchases, use the vendor on the invoice, not the credit card vendor. If the invoice was paid by credit card at the time of purchase, use the Amount Paid At Purchase field at the bottom of the invoice window to record the credit card payment. After you enter the amount paid, two more fields will appear Reference would normally be used for a check number. Since you don’t have one you’ll have to make something up. The date works well, follow it with another digit if you have more than one credit card purchase on the same day. Change the Cash Account to the liability account that you set up for that credit card. If you have the option turned on to hide GL accounts in accounts payable, your liability account won’t show on the list. In that case you will have to change the cash account by clicking on the Journal button at the top of the window.
If you have an invoice that is already in payables and later decide to pay it with a credit card, don’t use the Amount Paid At Purchase field. That would cause the payment to have the same date as the invoice. You can use the Payments window like you would for a manual check. Just change the cash account to the credit card liability account, and enter a dummy check number. That will remove the invoice from your open payables, and add it to the balance of the credit card liability account.
When you get your statement, you have 2 options. (1) You can enter an invoice using the credit card vendor posting the entire statement balance to the credit card liability account (use your regular payables as the AP account). That will move the balance into your regular accounts payable, and the invoice you entered for the statement will show up on your aging. (2) Or you can skip the invoice and, when you record your payment, use the credit card liability account in place of an expense account. Using that method, your credit card balance will not show up on your aged payables. It will be tracked entirely in the credit card liability GL account. Either way, you can use Peachtree’s Account Reconciliation to reconcile the statement with your credit card liability account. Just remember that since liability accounts have a credit balance, you’ll need to enter the statement ending balance as a negative.
