This is a situation I come across quite often when I do cleanup work.  Even when I do the work in a firm that has a bookkeeper!  

Sometimes we work very quickly.  We get excited about the bank feeds!  Who doesn’t, right???  We love to clear them.  But sometimes in our haste, we select the QuickBooks suggestion.  

Cause, heck, QuickBooks is always right, isn’t it?  Well, sometimes we find out the hard way…. by way of the “uncategorized asset” category.  It rears its ugly head on the balance sheet.  You may not have noticed it.  You send the file to the CPA or tax professional and lo and behold, he or she asks, “what is in this category”?

You look and there they are.  A bunch of credit card payments.  How did they get there?  How can you fix this?  

Fix a duplicate credit card payment:  Finding the offending transactions

Generally, many people don’t discover this issue until they review their balance sheet.  (For more tips on year-end procedures, see this post).  Trying to clear up the uncategorized account reveals that you have not one, but two transactions for the same event.  What should have been entered as a check out of the operating account and posted to the credit card account has been downloaded to show as an expense in the bank account and a credit card credit in the credit card register.  Yes, two transactions!

How does this happen?  Generally, exuberance in clearing the bank feed.  When you first see the transaction hit the credit card, you download it.  Maybe even picking QuickBooks “suggestion” of transfer to the uncategorized asset account.  Then the next day or so, it hits the bank account.  It comes in as a transfer and if not coded directly to the bank account when it is first downloaded on the credit card side, it won’t see the match.

Fix a duplicate credit card payment:  The best practice to fix it

It is my experience that it is best to pick the expense or check transaction and code it to the credit card account.  Then void or delete the credit card credit.  Now remember (and this is demonstrated in the video), this will unbalance and cause your credit card to have the yellow error message and the beginning balance will be off by that deleted credit card credit just like pictured below.

Fix a duplicate credit card payment: Re-reconciling the one modified transaction

We have to re-reconcile the credit card side of the transaction to get the credit card side to balance again. Remember that expense or check is what is replacing the credit card credit.   We go to the register view and find the newly updated expense or check entry and we force it to be reconciled by clicking the cleared column until an “R” populates.   Now we are re-reconciled, removed the duplication and all good!

Last piece of advice… Avoiding the error in the first place

ProAdvisor Tip:  When you have completed the credit card reconciliation, just enter the payment right then.  Use + write check and add the check from the operating account.   The expense account will be your credit card account (be sure to break it out by the sub accounts if that is applicable with your credit card account.

If you have any questions or would like to see a future video on another topic, please reach out to me on Facebook.