How Does FlexBooks Handle Credit Card Funds?

How Does FlexBooks Handle Accounting For Credit Card Funds?

FlexBooks handles the accounting for credit cards with two steps – just like it happens in real life.  

Step 1: Recording the Sale

Example: On Day 1, a client charges their credit card.  

For all credit card charges, FlexBooks creates a QB Sales Receipt on the day of the charge.  This Sales Receipt recognizes and categorizes the income and sends the funds to "Undeposited Funds" / "Payments to Deposit".  

At this point, you will see the income for this transaction in the Profit & Loss report (under its associated Income Category) and the funds for this transaction in the Balance Sheet (under Undeposited Funds / Payments to Deposit).

Step 2: Recording the Deposit

Example: On Day 2, MindBody tells Transfirst that the funds are now cleared and to make a deposit into your checking account. 

FlexBooks will create a QB Deposit (we'll call this the "FlexBooks Deposit") to record the receipt of the funds in the checking account.  This QB Deposit moves the funds from Undeposited Funds / Payments to Deposit and into your checking account on the Balance Sheet.

What do I need to do to account for my credit card funds?

FlexBooks automatically handles the first two steps for you but there's one step final that you'll need to do yourself. 

Step 3: Matching the Deposit FlexBooks created to the Bank Feed deposit

Example: On Day 3, your QBO bank feed syncs in a second deposit that exactly matches the deposit created by FlexBooks the day before. 

Assuming you are using QBO's Bank Feed to sync to your bank account –  the bank feed will bring in a second deposit to exactly match the deposit created by FlexBooks the day before.  You will need to Match the bank feed deposit to the deposit created by FlexBooks. This tells QB that the QB Deposit created by FlexBooks and the QB Deposit synced in by the Bank Feed are the same deposit and not to count the recorded income twice.

Please see the article How Do I Match My Deposits?

How does Matching my deposits make sure that my income isn't counted twice?

Matching is a feature created by QuickBooks specifically to this situation. By using "Match", we are able to tell QBO that a transaction brought by the Bank Feed has already been recorded in QBO and not to count it twice.

For more information, see the video Matching Bank Feed Transactions in QuickBooks Online