Recording Purchases Made by Credit Card

The convenience and security, not to mention the various perks, associated with using a business credit card make plastic an attractive payment option for business of all sizes. Business credit cards can help drive automation and efficiency throughout the payment cycle, simplify payment processing and improve cash flow and forecasting.

However, one difficulty in using credit cards for business purchases is reconciling the purchase through your accounting system. The bill comes from the credit card company, but the credit card company isn’t really the vendor. For budgeting and tax reporting purposes, you may want to track the actual vendor involved in the transaction.

Fortunately, Sage 100 ERP makes recording this type of transaction fairly straightforward. When entering an invoice to record the credit card purchase for your credit card vendor, you can transfer the purchase amount from the credit card vendor to the purchase vendor (the vendor from whom you purchased the items) to track Form 1099 and payment history for the purchase vendor. Payment history is recorded for both the purchase vendor and the credit card vendor.

You can record the credit card purchase when entering the invoice in Accounts Payable Invoice Data Entry or when creating the invoice on the fly in Manual Check and Payment Entry. Here’s how:

To record a credit card purchase using Invoice Data Entry
1. Select Accounts Payable main menu | Invoice Data Entry. The A/P Invoice Data Entry window appears.
2. In Invoice Data Entry, at the Vendor No. field, enter the credit card vendor number.
3. At the Invoice No. field, enter a new invoice number.
4. On the Header tab, enter the invoice information.
5. Click the Lines tab and click Transfer Information. The Purchase Vendor Transfer window appears.
6. In the Purchase Vendor Transfer window:

a. At the Vendor Number field, enter the purchase vendor number. Do not enter the invoice number.
b. At the G/L Account field, enter the purchase vendor’s general ledger account number. This field defaults to the general ledger account number entered for the purchase vendor in Vendor Maintenance.
c. At the Transfer Amount field, type the purchase amount to apply to the purchase vendor.
d. At the 1099 Form and 1099 Box fields, select the appropriate options for your 1099 form and click OK.

7. In Invoice Data Entry, click Accept. The credit card purchase is recorded.

To record a credit card purchase using Manual Check and Payment Entry
1. Select Accounts Payable main menu | Manual Check and Payment Entry. The Manual Check and Payment Entry window appears.
2. In Manual Check and Payment Entry, enter the bank code and check number. For more information, see Manual Check and Payment Entry – Fields.
3. At the Vendor No. field, enter the credit card vendor number.
4. At the Check Date, Check Amount and Comment fields, enter the check information for the credit card vendor.
5. Click the Lines tab and then click Create G/L Distribution. The General Ledger Distribution window appears.
6. In the General Ledger Distribution window, click Transfer Information. The Purchase Vendor Transfer window appears.
7. In the Purchase Vendor Transfer window:

a. At the Vendor Number field, enter the purchase vendor number. Do not enter the invoice number. For more information, see Purchase Vendor Transfer – Fields.
b. At the G/L Account field, enter the purchase vendor’s general ledger account. This field defaults to the general ledger account number entered for the purchase vendor in Vendor Maintenance.
c. At the Transfer Amount field, type the purchase amount to apply to the purchase vendor.
d. At the 1099 Form and 1099 Box fields, select the appropriate options for your 1099 form and click OK.

8. In the General Ledger Distribution window, click Accept. The credit card purchase is recorded.

Keep In Mind
• This procedure assumes an invoice was not entered for the purchase vendor. You can perform this procedure throughout the period and when processing the monthly credit card statement.

• Job detail cannot be entered using this procedure. An invoice referencing jobs must first be entered for the purchase vendor and then transferred to the credit card vendor.

As always, we’re standing by should you need help. Please don’t hesitate to contact us.

Robin Reeder

Robin is a member of the BKD Technologies Sage Software team. With more than 25 years of experience in public and private accounting, as well as accounting software support, Robin provides accounting and technology consulting services for a wide range of industries, including accounting software project management, installation, implementation, training and ongoing support services.

Robin Reeder – who has written posts on Sage ERP Insights.


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