DBD: Vendor Payments via Credit Card

System Setup (Required)

Before processing any credit card payments, ensure your system is configured with the correct General Ledger (GL) accounts and bank codes.

1. General Ledger Account Setup

• Create a new Accounts Payable Clearing Account on your Financial Statements.
• Name it "Credit Card Clearing Account."

2. Bank Account Configuration

• Accounts Payable → System → System Setup → Bank Accounts.
• Create a new Bank Account Code (e.g., Bank Code C to indicate payment by Credit Card).
• Set the Check Type to P  (this generates a long-stub document with a footer note reading "Paid by Card").
• Set the Post General Ledger Cash Account field to link directly to the new Credit Card Clearing Account created in Step 1.

3. Vendor Defaults

• Standard Vendors: For vendors you always pay via credit card, navigate to Vendor Setup > Vendor Tab and assign your new credit card bank code as their default.
• One-Off Payments: If you are making a one-time credit card payment to a standard vendor, manually update the Bank Code field on the 2nd payment panel of the AP Invoice during invoice entry.

4. Purchase Order Receiving

• Process orders and PO receiving normally. Invoices will still post to the specific trade vendor you purchased the merchandise from.
• During Accounts Payable invoice entry, ensure your credit card bank code is explicitly entered in the "Print Check on Bank" field on the 2nd payment panel.

Processing Workflows

Choose the method below that best aligns with your team's tracking preferences.

Method 1: Statement-Driven Processing

Use this method if you prefer to wait until you receive your official monthly credit card statement before processing payments in the system.

• Step 1: Check Number Convention Establish a consistent naming convention for manual check entries since no physical check is printed. A recommended option is using the date format (e.g., MMDDYY). Ensure these are processed using your dedicated credit card bank code.
• Step 2: Payment Execution (Choose Option A or B)
  • Option A: Manual Check Payment Go to manual check entry, enter your custom check number, and select the appropriate Vendor Code. Enter the total payment amount and select all invoices covered by that specific transaction.
  • Option B: Automatic Payment Selection - Accounts Payable → Check Processing → Automatic Selection. Restrict the filter to only pull invoices assigned to your special Credit Card Bank Code. Run the Suggested Payment Report to verify totals and discounts. Print the "checks" onto standard stock paper using a unique starting check number sequence, then update your journal.

• Step 3: Statement Reconciliation When the credit card statement arrives, enter it as a standard AP Invoice under your Credit Card Company's vendor profile for the total statement balance. Use your Cash Disbursement Report as supporting documentation—the totals should match exactly.
  • Map the offset lines for vendor invoices directly to the Credit Card Clearing Account.
  • Map any miscellaneous fees or unrelated monthly charges to their respective expense accounts.
  • Pay the credit card company's invoice during your normal weekly payables routine.

Method 2: Real-Time Payment Processing

Use this method if you want to clear vendor invoices and hit your clearing account immediately as transactions happen throughout the month.

• Step 1: Immediate Invoice Closing As soon as a vendor invoice is updated with the Credit Card Bank Code, immediately process the payment via manual check entry or a computer-generated run using Bank Code C. This marks the vendor invoice as Paid, debits Accounts Payable, and credits your Credit Card Clearing Account.
• Step 2: Statement Entry & Clearing When the monthly credit card statement arrives, enter it directly into Accounts Payable Invoice Entry under the Credit Card provider's vendor file.
  • Enter a Debit for the cumulative value of the vendor invoices previously sent to the Credit Card Clearing Account (this clears out the temporary balance).
  • Add individual lines for any other monthly miscellaneous charges or card fees, mapping them to their correct expense accounts.
• Step 3: Final Settlement Issue a standard AP check to your credit card company when the statement balance comes due.

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