Credit Card with mutiple Sub-Accounts

QuickBooks Help QuestionsCredit Card with mutiple Sub-Accounts
Cynthia Russomanno asked 5 years ago

I watched your video on how to enter credit card transactions in the new QBO. It was very clear and easy to follow. However, my problem is how would you show payments if: There is a credit card account that serves as the CORP parent account, and several employees were issued their own credit cards and all of their transactions are consolidated into the CORP parent account. At the end of the month, only the CORP parent account gets a statement and then paid. After paying the parent account, how can I show that each sub-account was paid as well?
Per advice from other bookkeepers, I created the CORP parent account (not connected to online banking) and the sub-accounts (connected to online banking).
Thank you. I will appreciate your advice very much.

Hello Cynthia,

Great question!

If you receive one credit statement but the statement is tracking expenses by all the subaccounts (normally they do), here is what I would do.

  1. Record expense transactions by each subaccount. Each subaccount will show credit card liability at this point.
  2. Make the credit payment (full payment or partial). Apply this payment against the parent account. Now, this parent account will show the negative balance.
  3. Once you receive the statement and when ready to reconcile the account, allocate the payment (percentage based on expense transactions). You can write a Journal Entry for this one. Credit = Parent. Debit = Subaccount. Parent account should show zero balance.
  4. Reconcile the Parent Account. (You can not reconcile both the Parent and Subaccounts). Net Balance for this register should match credit card ending statement balance.

Hope this helps!

Your Answer

18 + 8 =