Our clients frequently purchase by credit card. While credit card purchases are easy for the purchaser, the management of credit card purchases can be difficult for the accounting department. With the process outlined below, you can accurately track credit card purchases for each transaction, and track the purchases made with a specific vendor as well in Dynamics GP.
Credit Card Purchases are entered differently depending upon the type of transaction:
CASE 1: Non-Inventory Purchases
CASE 2: Inventory Purchases
As both of these types of transactions have an in-depth process, I have split Case 1 and Case 2 into two blog posts. First I will cover transactions not related to inventory. In my next post I will cover Inventory related transactions paid by credit card.
CASE 1: NON-INVENTORY PURCHASES
- Enter the Payables Transaction: Purchasing > Transactions > Transaction Entry.
- Doc. Date: Change date to the Vendor's invoice date.
- Vendor ID: Enter or select the vendor.
- Payment Terms: Select the Vendor's terms, if not default.
- Document Number: Enter the Vendor's invoice number. If no invoice number is available, enter Doc. Date (mm/dd/yy).
- Description: If desired, return to the Description field and enter a description for the transaction, such as September Fees.
- Purchases: Enter the invoice amount.
Below is an example of a completed Payables Transaction Entry window:
- Enter the Credit Card Payment
- In the Payables Transaction Entry window, tab to the Credit Card field. (If you tab past the field, you will need to delete the invoice and start over.)
- Enter the invoice amount, then tab, this will open the Payables Credit Card Entry window.
- In the Payables Credit Card Entry window:
- Select the Card Name (this should correspond to the Vendor account for this credit card).
- The credit card should be setup before entering any invoices. This is done in the Credit Card Setup window. Administration > Company > Credit Cards.
- Enter the Card Name, such as Visa, MasterCard, AmEx, etc.
- Mark Used by Compnay.
- Enter the Vendor ID for the Credit Card. If this is a Debit card and comes directly out of the Checking account, mark Check Card and enter the Checkbook ID.
- Click Save.
- Input the date the amount was or will be paid by the Credit Card. Click OK.
Back in the Payables Transaction Entry window: Click the Distributions button to verify correct distributions. There should be a debit to the expense account for this transaction, and a credit to accounts payable. If correct, click OK.
Click the Post button in the Payables Transaction Entry window.
At this point you have entered the invoice and payment for this vendor (in this example, A Travel Company). If you look at the Transactions by Vendor, you will see both the invoice and the payment are entered and applied.
At the same time, this is entered as a payable for the Credit Card Vendor.
Now, when you do a Select Checks for the credit card company, all the invoices that are due for that payment are available for selection. You should only mark next to the transactions that are included in the current bill.
If you don't pay the credit card by check, you can enter a Manual Payment and apply it to all of the invoices that are included in that bill/payment transaction.