Pay vendors with company credit card?

2006-01-06
2013-05-02
  • Chris Farley
    Chris Farley
    2006-01-06

    How would you set up an account for a credit card that is used in my business to pay vendors?

    I'm thinking I should set up a new bank and bank account for the credit card.

    This seems weird, because banks need to be set up as "checking" or "savings" accounts, and I'm not really sure how to set up the accounting.

    Is there a better way to do this? Thanks!

     
    • Q Wang
      Q Wang
      2006-01-07

      I have the same question too.  Currently, my solution is to create another bank account (credit card bank account) for my credit card, and use the this credit card bank account to make the payment (write the check) to the vendor for the purchase order.  Then, from my day-to-day bank account, I will make the payment to my credit card holder (business partner - me as an employee).  Therefore, the transaction of the purchase order and its payment could still be traced.  However, as you mentioned, the credit card bank account looks wierd as I have no idea if it is a checking or saving account.  I believe there is a better solution out there, and if anybody who have it could provide suggestions on this problem that will be very helpful.  Thanks!  Qingyu

       
    • Chris Farley
      Chris Farley
      2006-01-08

      That's pretty much how I was thinking about setting this up. If I'm understanding you correctly, you set up the bank account as being owned you (business partner). You un-click "Own Bank". But how does a payment to you (as a business partner) end up affecting the bank account you created?

      When you select "Checking" or "Savings"... what does that do, really? My guess (completely untested at this point) is that is changes the accounting for the bank account. Okay, I just tested it, and it doesn't do that. My new guess is that it does nothing, and it is just a reference.

      So I bet you could just configure the accounting for the bank account manually. For example, under "Bank Asset", you would list a liability account like "Credit Card Liability". Which seems weird. But possibly correct.

       
      • Q Wang
        Q Wang
        2006-03-20

        This is still an unresolved issue for me.  The scenario sounds like a common business process:
        1. The card holder uses his credit card to pay for products and services first (Payer: the credit card company; Payee: multiple vendors, each with an individual invoice)
        2. The card holder's company pay the credit card company for all the purchase after a month (Payer: Card holder's company; Payee: Credit card company)

        If we think about the bank statement mailed to us from our bank, the credit card payment is just one line paying for everything.  This one line matches the total amount of the statement from the credit card company which indicates many vendors (BP) each with an invoice. 

        Is there a way in compiere that allows us to make one payment - from our bank account - to the credit card company - for multiple invoices - and each invoice is a transaction with a different vendor paying for different types of products/services?

        I am not able to figure out how to keep so much inforamtion (different vendors as business partners, each invoice amount, the card holder company as payee - business partner as well) in one payment.  And at the end of the day, this payment should be reconciled with that bank statement line that mentioned at the beginning.

        Any thoughts...?

         
    • ADAXA
      ADAXA
      2006-03-21

      Would it be enough to set up the AMEX as a BP (Vendor) and then add a BP contact for each AMEX cardholder.

      Process each employees AMEX statement (or employee expense report relating to same) as a Vendor invoice from AMEX and select the employee as the BP contact. Enter a line per AMEX statement line for that AMEX card and if necessary enter the vendor info in the desription field in the vendor invoice line.

      Then raise a payment to AMEX to clear one or many AMEX "invoices"

      That would be ok here but perhaps there are different requirements in your jurisdiction.

      regards

       
    • ADAXA
      ADAXA
      2006-03-21

      pls ignore previous post .. just noticed that POs are being raised to individual vendors and therefore these need to be matched to vendor invoices. Looks like it has to be the 'credit card bank' approach.

       
    • Q Wang
      Q Wang
      2006-03-23

      The "credit card bank" approach does not seem working either due to the following reason: The credit card bank account should not be a bank account of our company - therefore, all transactions related with it should not be posted in our book.  Therefore, if we create a bank account named "credit card bank account" and use it to make the payment, the bank in transit account will be credited for the first time; and then we use our day-to-day business account to make a payment to the credit card holder, the same bank-in-transit account will be credited the 2nd time.  So this should not be the way it works.  There is a 3rd party here: the credit card bank - the bank who makes the payment for our invoices first, and we need to pay back at the end of the month.  So, what will be a reasonable workflow here?

      My dumb solution is to incorporate the credit card statement (all the statement lines) into the bank statement (all lines from the credit card statement to replace one line in the bank statement), and make an invoice for each of the lines in the "consolidated bank statement".  Then process each invoice, make payment for each invoice, and reconcile the "consolidated bank statement".  I am not sure if this is a reasonable solution and how different it is from what has been practised in the compiere world and accounting world. 

      Using credit card to make payment is so usual in today's life but isn't there a better workflow to get this processed in compiere?  How do you think about the idea above?  Thanks...

       
    • Chris Farley
      Chris Farley
      2006-03-29

      For each credit card bank account I set up, I create two new liability accounts -- for example, "Amex Corporate Card" and "Amex Corporate Card In-Transit". Under the bank account accounting tab, I set the "Bank Asset" and "Bank In Transit" accounts to the above accounts.

      That way, it will not credit/debit your main bank account account.

      To make a payment on the credit card I "transfer" money through an intermediate account. I set up an account called "Inter Bank Transfer Suspense" and also create a charge for this account.  I make a payment out of my checking account, with the "Inter Bank Transfer Suspense" charge. I receive a payment in the credit card bank account with the same amount and same charge.

      It's a bit tedious, and it would be awesome to automate Bank Transfers with some custom code.

      I'm not sure I totally understand how you are doing it, so I can't comment on your way.