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How To Accept Payments Online

April 26, 2021
Bill Kimball

how to pay a credit card in xero

Xero bank transfers are used to reconcile bank transactions when you transfer money from one bank account to the other. Many times in other accounting programs they handle multiple bank accounts / credit cards differently. I wanted to put together a post to talk about how Xero bank transfers work. When it comes time to pay off your Credit Card balance, make a Transfer from your checking account to the Credit Card. You do not have to create an invoice as the Transfer links the payment between the two bank accounts.

how to pay a credit card in xero

You then code these expenses to the appropriate expense code and use the transfer to account for the payment. When you pay the credit card bill, transfer it from your current account to the credit card account. I made a business credit card payment out of my personal checking account. I know I need to submit it as an expense claim but not sure to expense the cost so I can use it to reconsile the credit recorded on the business credit card account. If I record it as a bill, then pay it from my checking account, there’s no automatic entry in my Amex register.

How To Add A Payment Service In Xero

You likely have a credit card to cover many of your business expenses and at least one bank account to cover operating your business and payroll. Stripe is a leading online payments solution that lets your customers pay with credit card or debit card. Stripe handles billions of dollars in transactions in multiple currencies every year. Just because you know how to accept payments online, doesn’t mean you have to do it every time. To help keep costs down, businesses tend not to offer online payment on invoices of more than $5,000. While it should cost you nothing to set up a merchant service provider and accept online payment, there will be transaction fees. For debit and credit cards, the fee works out to between 2% and 4% of the invoice value.

The transactions you have against the credit card should be either spend/receive money, or AP with the credit card being the method of payment. Yes, you need to edit the import file to show spends as negative amounts and payments that pay down the card balance as positive amounts. Alternatively, as you’ve indicated above you load a Bill for Amex with lines coded to the various expenses on the statement. When the payment from your checking account comes through your bank feeds you’ll match this to the Amex bill. Bank transactions download for both accounts and it reconciles. I want to pay a credit card balance with a printed check. But I simply cannot find ANY way to do it because Xero tries to be so smart hiding which accounts I can select for things.

It also puts the bank transaction back on the Bank account reconciliation screen. Let’s say that you reconcile your bank account and make the transfer, but when you go to reconcile the other account it doesn’t light up in green. So you go ahead and just reconcile it by transferring it back to the bank account. Neither transfer are matched to each other and both bank accounts are looking for the transfer. If you have 3 bank accounts–operating, savings, and payroll.

Reconcile A Credit Card Refund

Businesses using online payment options with Xero invoices get paid faster, and it’s easy to do. Accept online invoice payments and get paid up to twice as fast by connecting to Stripe, GoCardless and others. If you managed the CC outside a bank feed, it is hard, you would have to create a payable invoice then pay it off via the cheque account payment, but this is more manual. This would be ok in regards to the P&L as it will pull the date of the invoice, so it will put it in the right month. You can have your credit card set up as a bank feed.

how to pay a credit card in xero

You can accept payments from your customers through their PayPal accounts from anywhere in the world, in the currency of your choice. When doing your business accounts, you’ll need to treat the transaction fee as an expense. You’ll want to match it with the payment so you can correctly calculate your profit on the order. Smart accounting software can do that for you, automatically. Merchant service providers are specialist companies that handle online payments for you. Generally speaking, some of them focus on debit and credit card processing, others focus on ACH processing, and a third category looks after direct debit.

Credit Card Payment

I’m just learning Xero and I’m wondering whether I’ve got the correct procedure for dealing with payments I make using the company credit card. In particular, I’m not sure what the proper use for the Credit Card Control Account might be.

Payment records are cleverly matched to your customer records in Xero. Making it simple for South African businesses to accept instant and secure payments online via Credit Card, Instant EFT, MasterPass, Bitcoin and more. Let’s say that you transfer $500 from your bank account to your savings account each week. You log into Xero at the end of the month to reconcile your bank account. You have 4 transfers for the same amount to the savings. You reconcile the July 7th bank transaction transfer to the savings.

In this guide, we will add a credit card to Xero’s demo company. We use our own money to pay on the credit card of the business.

Ive Got All My Figures And My Accounts At My Fingertips Its Brilliant.

You should have a feed set up for your credit card, which means your expenses are already accounted for. All that needs to be recorded is a payment on the card, and you need to pay the card from another bank account. So record a Receive Money to your bank account and post it to Loan , then record a Transfer from the bank account to the credit card. That will leave you with two offsetting transactions in your bank account that will need to be manually reconciled.

  • I then approved the CN and applied a cash refund at the bottom of the page.
  • When it comes time to pay off your Credit Card balance, make a Transfer from your checking account to the Credit Card.
  • Hi, I use the credit card for my business for almost all expenditure relating to my business and occasionally cash or an alternative card if I don’t have the company card to hand.
  • Please don’t confuse this company business cards that are expense on the expense side.
  • What I still can’t figure out is how do I remember to pay the credit card bill on time?

Next, you may need to enter the opening balance of the credit card if you have already been using it. You can do this by following the steps in this tutorial on how to add an opening balance to a bank account, credit card or PayPal account.

I’m new to Xero and loving just about everything in it after about 10 years of QuickBooks drudgery. However, accounting for the payment of my business Amex from my checking account hasn’t been fun. Sign up for a free PayFast account online and accept payment within 48 hours. You can enable the Xero integration through the settings page on the PayFast dashboard and follow the steps.

So the payment coming out of the Checking account will create a transaction, and the payment to your Credit Card will be another transaction. To reconcile these, you need to create a Transfer. What is the preferred method for entering a credit card payment in Xero? In QuickBooks I had a vendor for the bank or credit card company and a credit card account for the credit card. I would enter a payment in my checking account to the credit card vendor, and expense it against the credit card’s liability account.

What we usually recommend in this situation is to use bank Transfers to pay off a Credit Card. Currently you can only attach the invoices to bills, but this will soon be changing, possibly in the next few months. you need to use an expense account in the line where you choose your expense. THen in the Paid From you choose the account where you pay the expense from. This is where the Credit Card account could be selected.

It’s unlikely you’d need to offer all of these payment options. Customers that are offered convenient online payment methods pay invoices earlier than usual. Here’s how small businesses can cash in on the trend. Accept online invoice payments and get paid up to twice as fast by connecting to Stripe and other payment solutions. Xero online invoices and payments provide better protection from fraudulent activity.

The credit card company deducts a lump sum payment for all cards from our main bank account. I have a credit card account and a checking account.

Starting with your business bank account you click the transfer button and choose the credit card account to reconcile it. You have now told Xero that a transfer has happened from your bank account to your credit card account, so when you go to reconcile the credit card Xero will look out for that transfer.

How is this different than a utility bill for example. I’m a little confused by the Account Payable module and its handling of credit card accounts. I expected that when I received an invoice from my credit card provider, I would be able to enter an accounts payable invoice to be applied against the credit card account in Xero. However, when entering the invoice, the credit card account is not list in the accounts column. If I use a different account type , then it functions as I would expect. If you use credit cards in your business you may want to add them to Xero alongside your other bank accounts.