How to Properly Set Up a Credit Card in QBO

First Things First

One of QBO's best features is its ability to connect to your various banking and credit card accounts. Transactions automatically download; all you have to do is assign and categorize vendor names.

QuickBooks Online also does an incredible job of making most banks readily available to connect to. You'll have to input credentials and probably give the thumbs up to your bank using a passcode or text authentication. Still, the majority of banks you're working with will be available within QBO's database.

To connect your account, complete the following steps:

1. Hover over the gear icon in the top right-hand corner. Under Company, choose Chart of Accounts.
2. Select New.
3. Enter the Credit Card Account name (including the last 2-4 digits of the card number in the Account name if there are multiple credit cards).
4. Choose the account type, Credit Card.
5. Enter the Opening Balance and As of date, and a description if wanted.
6. Then choose Save.

Now we need to connect the account in QBO with your credit card account: (left off here)

1. Go to Transactions > Bank Transactions in the left-hand margin of your QBO screen.
2. Select Link Account in the top right corner of the screen.
3. In the search box, type in the name of your credit card company.
4. Hit Continue and enter your account sign-in and password information. 
5. Follow the prompts until you reach the Account Type dropdown. Locate the name you entered for the Chart of Accounts entry.
6. Complete the section to indicate how far back you want the transactions to go.
7. Select Connect. The system will connect with your bank and download expenses and payments from your credit card account.

Matching Transactions

You must categorize where the money was spent for each expense. For example, a credit card charge used to purchase copy paper and pens can be listed as Office Supplies.

QBO allows you to create Rules for repeated items like a Home Depot charge that might always default to the Repairs & Maintenance category.

When your credit card account is connected to QBO, transactions automatically download. When you are ready to match, do the following:

1. Choose Transactions > Banking from the left-hand side menu.
2. Click on the box that contains the credit card account you are working on.
3. Ensure all transactions to current have been downloaded. If they aren't, click on Update in the right-hand corner of the screen.
4. Click on the For Review tab.
5. Choose a Vendor or Customer Name and Category for each transaction. If the transaction is a payment and you paid it from your checking account connected to QBO, you can match it to the payment in checking.

The next step is reconciling the credit card account, which we cover in an article on how to reconcile using QuickBooks Online.