How To Record Credit Card Cash Rewards In QuickBooks Desktop & Online?

How To Record Credit Card Cash Rewards In QuickBooks Desktop & Online? : Here’s a guide on how to record credit card cash rewards in both QuickBooks Desktop and QuickBooks Online.

Section 1: Introduction

---

Credit card cash rewards are a popular feature offered by many credit card companies. These rewards provide you with a percentage or fixed amount of money back based on your credit card purchases. It’s important to accurately record these cash rewards in your accounting software to ensure accurate financial reporting. This guide will walk you through the steps to record credit card cash rewards in QuickBooks Desktop and QuickBooks Online.

Read Also : How To Record Cash Back Rewards In QuickBooks Desktop & Online?

Section 2: Recording Credit Card Cash Rewards in QuickBooks Desktop

---

2.1 Set Up an Income Account:

Before recording credit card cash rewards, you need to set up an income account specifically for tracking these rewards. Follow these steps:

1. Open QuickBooks Desktop and go to the Lists menu.
2. Select Chart of Accounts.
3. Click on the Account button at the bottom of the Chart of Accounts window and choose New.
4. Select Income as the account type and click Continue.
5. Enter a name for the account, such as “Credit Card Cash Rewards.”
6. Click Save & Close to create the new income account.

2.2 Record Credit Card Cash Rewards as Deposits:

Once you have set up the income account, you can record credit card cash rewards as deposits using the following steps:

1. Go to the Banking menu and select Make Deposits.
2. In the Payments to Deposit window, select the appropriate bank account where you receive the credit card cash rewards.
3. Enter the date of the deposit.
4. Enter the amount of the cash rewards in the Amount column.
5. In the From Account column, select the income account you set up for tracking credit card cash rewards.
6. Click Save & Close to record the deposit.

2.3 Categorize Credit Card Cash Rewards in Transactions:

When categorizing expenses or income transactions that involve credit card cash rewards, follow these steps:

1. Open the transaction, such as an expense or sales receipt, that includes the credit card cash rewards.
2. Enter the transaction details as usual.
3. In the account field, select the appropriate expense or income account associated with the original transaction.
4. In the amount field, enter the net amount after deducting the credit card cash rewards.
5. Select the income account you created for credit card cash rewards in the second line of the transaction.
6. Enter the amount of the credit card cash rewards as a negative value.
7. Click Save & Close to save the transaction.

Read Also : How To Fix QuickBooks Not Enough Memory Issue?

Section 3: Recording Credit Card Cash Rewards in QuickBooks Online

---

3.1 Set Up an Income Account:

Similar to QuickBooks Desktop, you need to create an income account in QuickBooks Online to track credit card cash rewards. Follow these steps:

1. Log in to your QuickBooks Online account.
2. Go to the Accounting menu and select Chart of Accounts.
3. Click on New to create a new account.
4. Choose Income as the account type.
5. Enter a name for the account, such as “Credit Card Cash Rewards.”
6. Click Save and Close to create the new income account.

3.2 Record Credit Card Cash Rewards as Deposits:

To record credit card cash rewards as deposits in QuickBooks Online, follow these steps:

1. Go to the Accounting menu and select Chart of Accounts.
2. Find the appropriate bank account where you receive the credit card cash rewards and click on View Register.
3. Click on the drop-down arrow in the Add (+) button and select Receive Payment.
4. In the Receive Payment window, enter the date of the deposit.
5. Enter the amount of the cash rewards in the Payment field.
6. In the Deposit to field, select the bank account where you want to deposit the cash rewards.
7. In the Category field, select the income account you created for credit card cash rewards.
8. Click Save and Close to record the deposit.

3.3 Categorize Credit Card Cash Rewards in Transactions:

To categorize expenses or income transactions with credit card cash rewards in QuickBooks Online, follow these steps:

1. Open the transaction, such as an expense or sales receipt, that includes the credit card cash rewards.
2. Enter the transaction details as usual.
3. In the Category field, select the appropriate expense or income account associated with the original transaction.
4. In the Amount field, enter the net amount after deducting the credit card cash rewards.
5. Click on Add another line and select the income account you created for credit card cash rewards.
6. Enter the amount of the credit card cash rewards as a negative value.
7. Click Save to save the transaction.

Read Also : How To Update SUI Rate In QuickBooks Online & Desktop?

Section 4: Reconciling Credit Card Cash Rewards

---

4.1 Reconciling Credit Card Cash Rewards in QuickBooks Desktop:

When reconciling your credit card accounts in QuickBooks Desktop, ensure that you account for the credit card cash rewards appropriately. Follow these steps:

1. Go to the Banking menu and select Reconcile.
2. Choose the appropriate credit card account to reconcile.
3. Enter the statement date and ending balance from your credit card statement.
4. Review the list of transactions to reconcile and make sure the credit card cash rewards are included.
5. If the credit card cash rewards are already recorded as deposits, ensure they match the amounts shown on your credit card statement.
6. Complete the reconciliation process as usual.

4.2 Reconciling Credit Card Cash Rewards in QuickBooks Online:

To reconcile credit card cash rewards in QuickBooks Online, follow these steps:

1. Go to the Accounting menu and select Reconcile.
2. Choose the appropriate credit card account to reconcile.
3. Enter the statement date and ending balance from your credit card statement.
4. Review the list of transactions to reconcile and ensure that the credit card cash rewards are included.
5. If the credit card cash rewards are already recorded as deposits, make sure they match the amounts shown on your credit card statement.
6. Complete the reconciliation process as usual.

Read Also : How To Export Invoices From Quickbooks Desktop & Online?

Section 5: Reporting and Analysis

---

Both QuickBooks Desktop and QuickBooks Online provide reporting features that allow you to track and analyze credit card cash rewards over time. Use the following steps to generate reports:

1. In QuickBooks Desktop, go to the Reports menu and select Custom Reports or Banking. In QuickBooks Online, go to the Reports menu and select Standard or Custom Reports.
2. Search for and select the appropriate report, such as the Deposit Detail report or Profit and Loss report.
3. Customize the report settings to include the income account for credit card cash rewards.
4. Run the report to view the credit card cash rewards transactions and analyze the data.

Read Also : How To Import Multiple Invoices Into QuickBooks Desktop & Online?

Section 6: Conclusion

---

Recording credit card cash rewards accurately in QuickBooks Desktop and QuickBooks Online is essential for maintaining accurate financial records. By following the steps outlined in this guide, you can set up income accounts, record credit card cash rewards as deposits, categorize them in transactions, reconcile accounts, and generate reports for analysis. Properly tracking credit card cash rewards ensures that your financial statements reflect the true income earned and expenses incurred, providing a clear picture of your business’s financial health.