Hello - I am a novice bookkeeper in need of some advice.

I am using a double-entry bookkeeping system. I enter monthly credit card charges (purchases and fees), which post against a long-term debt acct. Each month, the credit card company informs me of a minimum amount due on the overall credit card balance, which I would like to have show up on monthly Aged Payables report.

I would like to keep the long-term payable running balance off the short term Aged Payables report, to give a better monthly view of what is due each month, rather than what is outstanding (long term). However, since both types of charges relate to the same credit card account, the Aged Payables report shows the long-term balance every month.

I'm not sure what is the best way to separate these to show the long-term and monthly balances separately. Any ideas?

thank you in advance, Gary Rhoades

cbmb

First you need to let me know what system you're working w/ and the difference between a short term and long term aged payables report to that system.

In my mind, you should only see a "payable" on the report if you hit "accounts payable". All you need to hit 'accounts payable' with is the monthly minimum charges not the entire debt.

Or did you already hit A/P with the entire debt when you intiated the balance? Why don't you create a short-term and long-term A/P account? But I still need to understand how the system distinguishes.

garyr125

Thank you for responding. The system is an omnibus "business management" system called System5 and is produced by Windward software. It includes all common acctng functions except payroll.

Re "the difference between a short term and long term aged payables report to that system."

It doesn't recognize a difference. Payables are reported based on due date: 30, 60, 90 days, etc.

Re: "did you already hit A/P with the entire debt when you intiated the balance?"
I've had 4 bookkeepers who either entered or retained large capital expenses made with credit cards, into this account. As a result, each monthly AP report reports the outstanding balance for this credit card, not just the monthly minimum payt due, nor any preplanned installment payment.

Re: "Why don't you create a short-term and long-term A/P account?"
That may be the best alternative. The reason for (me) not doing it so far is that the system recognizes bills (and all things AP) as coming from designated and unique Suppliers. Since this large credit card balance is from one supplier, so far the transactions haven't been separated into long-term outstanding balance, and monthly recurring minimums.

Unless I'm missing some common acctng method to handle this, I may have to create a duplicate supplier to keep the transactions and balances separate.

cbmb

Okay - I think I'm missing something. You said

I've had 4 bookkeepers who either entered or retained large capital expenses made with credit cards, into this account.

When those bookkeepers entered the capital expenses made with credit cards the entry should have been Debit Expense (i.e. credit card expense) and Credit the Liability account (credit card account). There should not have been an entry made to A/P at any point in time. The only A/P entry should be made when there is an invoice/statement to pay- such as the one with the minimum balance. Then there should be a debit to the liability account (which I assume will include interest) and a credit to A/P. This should keep your A/P reports clean.

Is there an easy way for you to go back and correct those entries if they were improperly posted to A/P? If the liability account were properly set up (the credit card as 'long term debt') then there would be no A/P entry. There would already be a liabiilty account for the long term debt and then the A/P can be reserved for short term.

Let me know if this helps.

garyr125

Thank you, that does help. My transactions have been entered just as you describe. Your explanation gives me a framework to investigate this further.