I’m coming from Zoho Books, so please bear with me. I have a company credit card I want to track transactions to, incoming expenses. Then when we pay those expenses from our bank account I want to move that money from account to CC and pay balance down to zero on CC.
I’ve read a couple way to track CC here on the forum, and none of them see to work nicely. How would you recommend tracking CC the way I have stated?
Thanks for any help, I’m very new to erpnext, though I am used to double entry but it seems its not working exactly as I’m used to.
HI @jfreak53 welcome to ERPNext, I wish you a nice journey with us!
Like you said, there’s few options to treat credit cards in ERPNext, but the most standard is:
Your credit card is also a bank account
You can setup you credit card as an bank account Bank Account
Every expense or invoice paid with the credit card, should follow the flow
Sales Invoice (for booking) → Payment Entry (using the credit card as Paid From account)
It will allow you to use the Standard Modules of ERPNext like Payment Reconciliations and Bank Reconciliation properly for your credit cards!
Then you will ask, “Fine, but how do I register credit card bill as an expense/invoice?”
The answer is: You dont!
Using the Bank Reconciliation to manage your credit cards will allow you to reconcile your bill statement, when your “Credit Card Balance” balances with your “Credit Card Bill”, you only need to make a payment entry, from your bank to your credit card, but that will require, just an money movement from bank a to credit card b!
Thank you! So basically the CC should always run in the negative when I have a balance correct? Which I don’t mind of course. I had tried it as a liability account and it wasn’t working for me properly, I couldn’t use it as a CC account type, etc. Let me try this and get back to you. Thanks again!
I think root_type should be liability. Does root_type need to be asset to use it as a payment source (or does type=bank accomplish this)?
Plaid Integration automatically creates the account when linking an account. When linking a credit card, the system created an asset account (will most ofyhave a negative balance). This is what brings me to this thread.
What are the pros/cons for making root_type asset vs liability?
So that worked. Only issue im now facing is one these are showing in assets and liabilities, and not in income and expenses. As such my p&l report is empty. What an I doing wrong here? I invoice very little, most everything is direct online sales or another part of the business is cash deposited once a week, no customer names involved.
You’re missing half of the transaction here. If you’re using a credit card to pay off a creditor, the debt you have to that accreditor needs to accrue first. That would typically happen with a purchase invoice.
If you’re not sure what that means, we can explain further if you clarify your process a bit more. Did you create the transaction you’re showing with a Payment Entry?
Yes payment entry. I don’t issue invoices or POs. Need to record a simple transaction of incoming sale or deposit of cash for sale, then for some items subsequent purchase of cost of goods to sell, on my cc. Weeks later I pay off the cc from bank account balance.
A Payment Entry document is part of a payables/receivables cycle. If all of your transactions are concluded at point of sale, you won’t ever use it.
It sounds like you want to be using Purchase Invoices and Sales Invoices. Even if you don’t issue those documents, they’re the transaction you’re trying to represent. Both Purchase and Sales Invoices have a “Include Payment” field, which you can just tick by default if you’d like.
(All that said, it might be worth thinking about whether you really need ERPNext. It’s not simple software, and there are friendlier options if all you need is cash-basis accounting. Not trying to scare you away, and you’re definitely welcome here whatever the size of your business. This is a phenomenal platform, but expect a learning curve!)
Items are basically templates for invoices. You can use them, or you can just enter item details in directly. If you don’t want to deal with individual items, you can just use a single item called “Purchased Items”.
For things like UoM, if you don’t care about the value, you can just set it by default to “Qty” or whatever you like. UoM tends not to be very important for non-stock items.
Got it. I’m gonna give it a try and see if I can make it work for me. Only issue I have now is the CC account is showing a $1 surplus after making a sale for 39 and a cc charge to supplier for 38. Shouldn’t my bank account have that $1 surplus?
Oh, one more thing, the reason I want to use erpnext is cost centers. All the other financial tools I’ve found that work on cash basis sales, don’t do something like cost centers. But the issue is looking at the P&L, I can’t find a way to show cost centers in the P&L for comparison. I’d like a general P&L that shows the company as a whole, but like maybe cost center across the top where year is right now. I can’t find a way to add that column.
I’m not really following. Was the sale made to your credit card account or somewhere else? ERPNext won’t move money between your bank account and your credit card unless you tell it to (probably with a journal entry).
I must of done something wrong the first time when I made the sales invoice, in making a payment selecting the wrong to account. It worked, but now the CC has a balance:
Do I just do an internal transfer now from bank to CC to pay it off in the system?
That depends on how/when you pay off your credit card balance. But, generally, yes. Crediting a deposit account and debiting your credit card would be a common way to do that.
