To reconcile a credit card in QuickBooks, choose the card account on the Reconcile page, enter the statement's ending balance and date, and tick every charge, credit and payment that appears on the statement. When the Difference reaches $0.00, finish, then record the payment you make to the card company.
Setting up the QuickBooks credit card account to match the statement
A card reconciles cleanly only if its account is set up as a credit card account with the right opening balance. The account type decides how charges are treated, and the opening balance decides whether the first statement can ever agree.
In QuickBooks, a credit card is its own account type, created from the Chart of Accounts. Intuit's help for Desktop, Set up, use, and pay credit card accounts, says charges raise what you owe and are tracked as an other current liability. A card set up as a bank account would show charges as negative cash, and nothing would line up with the statement.
Choosing the opening balance
The opening balance is what you owed on the card at the start date of your books. A positive number means charges are pending. Zero means nothing was owed. Intuit's article also says a negative balance means you paid more than you owed. Take the figure from the statement that ends just before you began recording, not from memory.
Check before the first month
Compare three numbers before you reconcile for the first time: the previous balance printed on the statement, the beginning balance QuickBooks shows, and the opening balance entry. If the first two differ, the third is usually why. Fix the opening balance now. A wrong start makes every later month look like a missing transaction.
If you use sub-accounts under one card, reconcile only the parent. Intuit's Desktop article says charges and payments entered in a sub-account appear in the parent register, and only the parent needs reconciling.
Reconciling QuickBooks credit card charges and credits
Reconciling a card means marking each line on the statement as cleared in QuickBooks: purchases, returns and refunds, fees, interest, and the payment you made last month. The screen is the same as for a bank account, so the steps below are the QuickBooks Online route, with the Desktop differences noted further down.
- Have the statement for the period, and make sure the period's charges are entered and categorized.
- Go to All apps, then Accounting, then Reconcile. Select Get started the first time.
- In the Account dropdown, choose the credit card account.
- Check the Last statement ending date. Your new statement should start the day after it.
- Enter the Ending balance and Ending date printed on the card statement.
- Select Start reconciling.
- Tick each charge, credit, fee, interest line and payment that matches a statement line.
- Continue until the Difference shows $0.00, then select Finish now and Done.
Those steps follow Intuit's Reconcile an account in QuickBooks Online. For the screen in more detail, see the QuickBooks Online reconcile walkthrough.
Reading the signs on a card
On a card, the statement balance is what you owe. Charges and fees raise it, while payments, refunds and credits lower it. A refund entered in QuickBooks as a charge makes the Difference jump by twice the refund. If the Difference is exactly double a single amount on the statement, look for a credit recorded as a charge.
Fees and interest
Interest charges and annual fees often appear on the statement before anyone has entered them. Record them first as expense transactions on the card account, dated as the statement shows, and then tick them. Intuit's Desktop steps ask for service charges and interest at the start of the reconcile window for this reason.
Matching each charge to a receipt is a separate job from reconciling the balance; matching charges to receipts is covered in the Excel guide.
How do you record the credit card payment after a QuickBooks reconciliation?
Record the payment as money leaving your bank account and reducing the card balance. You have two ways to do it: pay now, which records a check or transfer from the bank to the card, or enter a bill, which records what you owe and defers the payment.
The prompt you see depends on the product. In QuickBooks Desktop, Intuit's Reconcile an account in QuickBooks Desktop says that for accounts other than bank accounts, QuickBooks opens a make payment window when the Difference is not zero. It lets you write a check or enter a bill to cover the outstanding balance, or cancel. Intuit's QuickBooks Online article ends at Finish now and Done and describes no payment prompt, so in Online you record the payment as its own transaction.
| Choice | What it records | Use it when | Watch for |
|---|---|---|---|
| Pay now (write a check or transfer) | Money leaves the bank account and reduces the card balance on the payment date | You pay the full statement balance at once | Date it as the bank shows, or next month's reconciliation will not tick it |
| Enter a bill | A payable for the balance, paid later | You pay in instalments or approve payments in a batch | The balance moves to accounts payable, so a later payment must be matched to the bill |
| Neither (cancel) | Nothing | The bank pays the card automatically and you will record that payment from the bank feed | The payment must still reach the books before the next card reconciliation |
Intuit's Desktop card article recommends paying the credit card at the end of a reconcile. Whichever you pick, post the payment to the card's liability account and never to an expense account. A payment coded to expense makes the card balance too high and overstates costs.
Pay by automatic debit
If the bank takes the payment by automatic debit, you will see it on the bank statement and the card statement. Enter it once. When the bank feed also brings it in, match it to your entry instead of creating a second one.
A worked example
The figures here are made up. Last month's statement closed at $1,840.00. This month the statement shows $1,200.00 in new purchases, a $90.00 refund, a $25.00 fee and a $665.00 payment. The new balance is $1,840.00 + $1,200.00 + $25.00 - $90.00 - $665.00 = $2,310.00. That is the ending balance you type into QuickBooks. Before you tick anything, confirm that the statement's own lines produce its printed balance. A statement that does not foot is a bank problem, and ticking will not repair it.
Next, check that the payment of $665.00 was recorded in QuickBooks on the date the card company received it. A payment recorded on the 30th but credited on the 2nd will sit in the wrong month and leave the Difference at exactly $665.00.
If QuickBooks shows a Difference of $180.00 after you tick everything, the refund is the first suspect, because recording it as a charge would produce twice $90.00.
QuickBooks credit card balance that won't match the statement
A card balance that will not match the statement points to a fixable cause, and the six below are the ones to check. Work through them in order, cheapest to check first.
- Wrong ending balance or date. Select Edit info and recheck both against the statement.
- Wrong beginning balance. An earlier edit may have moved it. Run the discrepancy report; fixing a discrepancy from an edited or deleted reconciled line describes the repair.
- A missing charge. The card company posted something you never entered, such as a subscription.
- A duplicate. The same charge arrived from a feed and was also keyed by hand.
- A refund recorded as a charge. The Difference is double the refund.
- Dates across the cut-off. A charge dated on the 31st by you but posted on the 2nd by the card company belongs to the next statement.
Set a rule: never force the card to balance with an adjustment before you have worked through this list. An automatic adjustment hides the cause, as Intuit's own advice to talk to your accountant first suggests. PreciseBankFlow checks that each card statement foots and lists differences as exceptions instead of adjusting them; it is opening to CPA and audit firms in small groups, and you can request a spot.
Does QuickBooks Desktop credit card reconciliation work differently?
Yes, in a few places. QuickBooks Desktop reconciles a card from a separate Reconcile window under Banking, asks for service charges and interest up front, and ends by opening a make payment window. QuickBooks Online uses the Reconcile page and records the payment as a separate step.
The Desktop steps from Intuit's article are:
- Go to Banking, then Reconcile.
- Choose the credit card account and confirm the statement date, beginning balance and ending balance.
- Enter any service charges or interest not yet recorded, then select Continue.
- Match each statement transaction by checking it in the Reconciliation window.
- If the difference is $0.00, select Reconcile now. If not, the make payment window opens.
The Desktop reports and the beginning balance trap are covered in reconciling in QuickBooks Desktop. Other ledgers use different matching models, and NetSuite bank reconciliation shows how one of them handles it.