Reconcile Accounts:
Credit Card

When it comes to reconcile accounts, credit card statements are not that different from reconciling bank statements.



Three Reasons to Reconcile Your Credit Card Statement

The main reasons you would reconcile your credit card statement instead of just entering the credit card charges in the detail of your check payment as you might do with other vendors are:

1) You don't pay your credit card in full each month so part of the balance caries over to the next month. This is the main reason that reconciling your credit card every month is necessary, regardless of your bookkeeping practices.

If you are carrying over a balance, you will need to reconcile your opening balance and your closing balance as well as new charges and any payments or credits, just like you would with a regular bank account.

2) The tax guidelines for your type of business stipulate that each vendor is entered separately. If you pay your credit card bill and enter all the charges as the breakdown for your check, your credit card company is the vendor. However that's not completely accurate, since each of your credit card charges were probably made with individual vendors.

3) Similar to reason two, if you do your bookkeeping on an accrual basis, you will enter your credit card charges and all your bills and then reconcile your credit card statements as well as your accounts payable and accounts receivable.

How to Reconcile Your Credit Card Statement

Reconciling your credit card account follows pretty much the same process as reconciling your bank statement, only on one side you would check off the payments made to your credit card company and any other credits, and on the other side you would check off all your credit card charges.

For a step-by-step of the process, see reconcile bank account.

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