Your church may have one or more credit cards that it uses, and you may be wondering the best way to track the balance and record expenses against your credit card for day to day use. Church360° Ledger allows you to quickly track payments made through credit cards, and pay off said credit cards when they come due.
First, you will need to set up a liability account to represent this credit card. For more information on creating a liability account, see our article: Adding a Liability account. Make sure the box for "Allow making payments from this account?" is checked, as well as "Allow entering a reconciliation for this account?" if you intend to reconcile your credit card statement. If your credit card is carrying a balance as of the date you are entering the initial balance for, be sure to enter that balance.
Once the liability account for your credit card has been established, you can start using it for credit card payments. Whenever you use your credit card to pay for a transaction, you will enter a payment (or journal entry, depending on your preference) transaction where the credit card will be used in place of the asset (bank) account, and you will still use an expense, liability or equity-backed fund expense account as you would normally. This transaction will increase the balance on the liability account for your credit card. A sample credit card transaction using a payment transaction is shown below:
When it comes time to pay your credit card bill, you would enter a transaction (Check, Payment, or Journal Entry, depending on your preference), where you select your bank account from which you are paying the credit card bill. On this transaction, the credit card liability will serve as the offset account.
If there is no interest being paid on the credit card, then this is the only offset account that will be used in the transaction. However, if you are also paying interest on the credit card, you should have a separate expense account for the interest. In this situation, the principal being paid on the credit card will go on the credit card liability, and the interest will go against a separate expense account.