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honesttogoodness
December 25, 2023
Solved

Applying credit card cash back to pay an invoice

I would like to apply cash back rewards from my credit card to pay off an invoice. How do I record this in QBO?

Rainflurry
RainflurryAnswer
Level 11
December 27, 2023

@honesttogoodness 

 

The advice from QB employees will not work.  

 

Go to New > Credit Card Credit.  Select your cc company under Payee.  Select the credit card where you want the cashback credit to be applied.  Select Accounts Receivable under Category, the amount, and your customer under Customer.  You now have a reduction in your cc balance and an A/R credit for that customer that can be applied to an invoice.        

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4 replies

Mark_AG
Level 1
December 25, 2023

I appreciate you posting your question about applying cash-back rewards to pay off an invoice in QuickBooks Online here in the Community space. I'm here to guide you on the correct process of doing it. However, I recommend asking help to your accountant when doing these steps.

 

If you're referring to your customer's invoice, you'll need to create and apply credit memos or delayed credits in QuickBooks Online. 

 

Here's how:

 

  1. Select + New and choose Receive Payment.
  2. Select the correct customer.
  3. In the Outstanding Transactions section, select the open invoice to which you want to apply the credit memo.
  4. In the Credits section, select the credit memos you wish to use and enter the credit amount you want to apply.
  5. Leave the Payment method, Reference no, Deposit to, and Amount received fields blank.
  6. Fill out the rest of the form, including the Payment date.
  7. Once everything is good, click Save and close.

 

However, if you're referring to paying off your bill using your credit card cash back, we'll need to create a Credit Card Credit transaction to record the cash-back reward and use the credit card account as a payment method when paying the bill for it to apply. 

 

Here's how:

 

  1. Click + New and select Credit Card Credit.
  2. Choose a Payee and choose the correct Bank/Credit account. If you don't have one, click + Add new and fill in the details.
  3. Choose any income or Credit card rewards as the category item and fill in the necessary details.
  4. Select Save and Close.

 

To apply it to a bill you want to pay, here's how:

 

  1. Click + New and select Pay Bills.
  2. Choose the credit card account as the Payment Account.
  3. Select the Vendor you want to pay.
  4. Hit Save.

 

Additionally, you can learn how to record a retainer or deposit when your customer deposits money as prepayment.

 

Please leave a message below if you have further questions about applying credit card rewards to pay off an invoice. I'd be glad to assist you anytime.

honesttogoodnessAuthor
December 25, 2023

Hello,

Thank you for your prompt response. I was able to record the credit card credit, however I want to use this credit to apply as payment to close out an open invoice for a specific customer, not to pay a vendor bill. If I follow your steps below, I can apply the credit to pay the invoice. However, then the payment shows up as needing to be deposited into a bank account and will not allow me to select depositing into a credit card account. What do I need to do differently to pay an invoice?

MJoy_D
MJoy_DQuickBooks Team
QuickBooks Team
December 25, 2023

Hello, @honesttogoodness. 

 

Thank you for getting back to us and then clarifying and providing us with more details about your concern. 

 

You can create a credit memo to record the cashback reward. Then, apply the credit memo to an invoice. Check out this article for detailed guidance: Create and apply credit memos or delayed credits in QuickBooks Online. 

 

To record the bank account you paid the credit card with:

 

  1. Go back to the + New button and select Pay down credit card.
  2. Select the credit card you made the payment to and enter the payment amount.
  3. Enter the date of the payment.
  4. Select the bank account you paid the credit card with.
  5. Click on Save and Close.

 

You can refer to the following articles for more information about paying a bill with a credit card and processing payments you make to your credit cards:

 

 

Need to reconcile your credit card account to make sure that your bank and credit card statements match? You can check this article for the workflow: Reconcile an account in QuickBooks Online.

 

Let me know if you need further help recording your transactions. I'm always here to answer them for you. Have a great day while staying safe!

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