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Credit Card Best Practices—Using ParishSoft ConnectNowAccounting Credit Card FeatureWhen processing parish credit card bills, credit card receipts are a key component of internal controls and best practices. Whenparish credit card purchases are made, the authorized parish credit card user should write the business purpose on the receipt, signthe receipt, and turn it into the parish office. In its “Ledger and Payables” module, ParishSoft has credit card feature. This featureties the data entry from the credit card receipts to the payment of the credit card bills. If a parish has good controls on receipts, ithas laid good groundwork for best practices.This handout is designed to walk you through the process of setting up and using the ParishSoft credit card feature.1. The first step is to setup credit card liability accounts. First, click on the “Ledger and Payables” tab, click the “Accounts” button,then click the “Chart of Accounts (Add Sub-Accounts)” link.1
This will bring up a search screen. In the Account Type box, select “Liability”, in the Entity box, select the entity the credit cards isassociated with (for this example, it will be the Parish Entity), and in the Natural Account box, select “2010: Accounts payable”.Credit card liability accounts should always use 2010 as the natural account. Click “Search” when finished.This will bring up one account. Click the “Add Sub-Account” link.2
Once you do this, an “Add Sub Account” Menu will appear. Input the name of the credit card account into the description field.Make sure that you change the Shortcut number to match the Diocese of Bismarck Chart of Accounts. Click “Submit” whencompleted.3
Once you submit this, ParishSoft will bring up an “Account Information” screen. Near the bottom of this screen, you will need tocheck the “Credit Card” check box and then submit. This is very important because if this box is not checked, the account will notappear when using the Credit Card feature or when performing a reconciliation of the credit card.Continue this process for each of your credit cards. It is accounting best practices to have a separate liability account for eachcredit card used in your parish.4
2. Once you have added your accounts, you can start making credit card transactions in ParishSoft. Click the “Ledger and Payables”tab and then click the “Credit Card” button.A screen will appear very similar to a bill. In the top section, you will select the credit card liability account associated with the creditcard used and you will also select the vendor. This vendor is not the credit card company. It is the vendor you performed thetransaction with. In the lower section, you will select the expense accounts you wish to record. Click “submit” when finishedentering the charge.5
These credit card transactions should be submitted into the software when a credit card receipt is submitted to the parish. Makesure that you retain all receipts with documented business purpose for these transactions, as they will be stapled to the creditcard bill when it arrives and is paid. If no receipt is submitted for a credit card transaction, this is taxable income to the card user.3. When you receive the credit card bill, you will want to reconcile the bill to your accounting software. Click “Ledger and Payables,”click “Process,” and click “Credit Card Reconciliation.”6
The rest of the process is the same as performing bank reconciliations; create a new statement with the same ending date andbalance as the statement you received from the credit card company. In this example, we received a credit card statement dated forthe period ended 11/30/2015 for 361.99 (3 charges: 100 to a supply store, 5.99 to a fast food restaurant for the pastor’s mealwhile at a conference, and 256 to an online store). You will “check off” each transaction that appears on your bill (note that in thisexample, there is one charge in my accounting software but not on the bill. This charge should be included on the next bill). Whenyour “difference” is zero, you should be able to click “reconcile.”7
Make sure that all transactions on the bill are on the Account Balance Report. If you have been entering transactions as youreceive receipts and you are missing a transaction, receipts with documented business purpose need to be collected for themissing transaction before the credit card bill is paid. If you pay the bill without performing this step and there are missingtransactions, the result will be a negative balance in the credit card liability account and an understatement of your expenseaccounts.NOTE: If you were to run a “Vendor Audit” Report using this process, credit card charges would appear in the detail of each vendorthe charge occurred with. If the “Credit Card” feature is not used, this breakdown by vendor would not be possible in ParishSoft.4. Once you have reconciled the credit card bill to ParishSoft, you are ready to pay your credit card bill. Click the “Ledger andPayables” tab, and then click the “Bills” button.8
This will bring up a bill to input information into. In the “Bank Account” dropdown, select the checking account you will be payingwith. In the “Vendor” dropdown, select the credit card company. In the account list below, select the credit card liability account(not an expense account. The expense was recorded when the credit card charge was entered earlier. The bill is to reduce theliability account). The amount to be paid will be the amount on the credit card bill. Click “Submit” when done. You may then paythe bill by either assigning a check number on the bill screen or by printing the check using the “Check” feature in ParishSoft (seeuser guide if you have questions on using these features).9
Repeat this process for each credit card used in your parish.The balance of the credit card liability account will only become zero after payment if all recorded transactions are on the bill. Ifthere are transactions in the software that are not on your bill, they will most likely be on your next credit card bill. The balance ofthis account should never be negative.It is accounting best practices to periodically check to make sure that credit card transactions are not outstanding (i.e. not appearingon a bill) for a significant length of time. If there are some transactions that were loaded into ParishSoft but don’t appear on thecredit card bills for a significant length of time, these transactions should be investigated.Once the credit card bill is paid, all receipts with documented business purpose, the check stub documenting the payment of thebill, and the “Credit Card Reconciliation Report” (Ledger and Payables Reports Transactions Credit Card ReconciliationReport) should be stapled to the bill, and the bill should be retained in the accounting files.NOTE: This process also would work for store charge accounts. The only difference is what you name the liability account.10
Credit Card Best Practices—Using ParishSoft ConnectNow Accounting Credit Card Feature When processing parish credit card bills, credit card receipts are a key component of internal controls and best practices. When parish credit card purchases are made, the authorized parish credit card us
