How to Categorize a Credit Card Payment in QuickBooks

by Avery Martin

In QuickBooks, credit card payments require you to use a different process than cash and check-based payments. When entering credit card payments, you should use either the Sales Receipt or Receive Payments section of QuickBooks. By entering the credit card charge properly, QuickBooks automatically categorizes the payment and makes it simpler to reconcile your income and expenses when it comes time to create reports and track income. When using credit cards to pay for business-related expenses, you can enter each transaction directly into the credit card register.

Pending Credit Card Applications

Processing credit card payments require you to complete a merchant application with Intuit. You can call the Customer Support line and talk with a representative if you receive an "In Review" notice when attempting to charge credit cards. After receiving approval, you need click the "Receive Payments" icon and select the "Turn On Payments" button. Provide your bank account information and information for the customer's credit card payment. When you click "Save," the Receive Payments window opens, allowing you to process and set up your first customer payment.

Charge Sales Receipts

Use a sales receipt when the customer makes a one-time payment for goods or services. Typically, most retail stores that sell goods use sales receipts. You can access the sales receipt option by clicking the "Create Sales Receipts" icon on the QuickBooks Home screen. Once there, select the customer that wants to make the payment from the "Customer:Job" menu and complete the required fields. You must enter information about the item, quantity, rate and amount. If you have already set up your inventory, these fields populate automatically when you select the item. Click "Save & Close" followed by "Submit" to process the transaction.

Charge Customer Invoices

The Receive Payments section works best for invoices and when you allow customers to pay for goods or services in installments. Create a payment when a customer uses a credit card by using the "Receive Payments" icon on the Home screen. Select the customer from the "Received From" menu, and provide the total amount of the payment in the "Amount" field. You don't need to complete the Reference and Memo fields, although adding a reference or memo makes it easier to find the transaction in the future. After inputting the customer's credit card information, check the "Process Payment When Saving" box and select "Save & Close."

Making Business Purchases

When it comes time to categorize your own credit card purchases, you can use the Banking section. Each credit card you use for your business has its own register. You can access the register by clicking on the "Banking" icon and selecting "Credit Cards." Select your card from the drop-down menu, and input each credit card charge directly in the register. Provide information about the name of the vendor and the amount paid, and then click the "Expenses" tab to add information about the account used to track the payment. For example, if you paid for advertising, you would select the "Advertising" expense account.

Disclaimer

Information in this article applies to QuickBooks 2013. It may vary slightly or significantly with other versions or products.

About the Author

Avery Martin holds a Bachelor of Music in opera performance and a Bachelor of Arts in East Asian studies. As a professional writer, she has written for Education.com, Samsung and IBM. Martin contributed English translations for a collection of Japanese poems by Misuzu Kaneko. She has worked as an educator in Japan, and she runs a private voice studio out of her home. She writes about education, music and travel.