Using the Pay down credit card feature moves money between two balance sheet accounts, so it never touches your profit and loss report. Your expenses show up on the profit and loss report when you record the individual purchases themselves, not when you pay off the card.
Why the payment doesn't show up as an expense
When you use Pay down credit card to pay your card, QuickBooks reduces your credit card liability and reduces your bank account balance. Both of these are balance sheet accounts, so the transaction has no effect on your profit and loss report.
This works the same way for other payment-only transactions. Receiving a customer's payment only affects accounts receivable and your bank account. Paying a bill only affects accounts payable and your bank account. Neither shows up as income or an expense, because neither is coded to an income or expense account.
How to make your actual expenses show up
To see your credit card spending reflected in your net income, record each purchase as its own transaction, coded to an expense account, when you make it.
- Select + Create.
- Select Expense.
- In the Payee field, select the vendor you paid.
- In the Payment account field, select the credit card account you used.
- In the Payment date field, enter the date of the purchase.
- In the Category details section, choose the expense account that matches the purchase, then enter a description.
- Enter the amount and tax, if any.
- Select Save and close.
Once you enter it this way, the purchase appears on your profit and loss report right away. Paying down the card later won't duplicate it or remove it.
A note on non-expense purchases
- Not every credit card charge belongs on your profit and loss report. If you use your card for something like inventory, that purchase increases an asset account instead of an expense account, so it's correct for it to stay off your profit and loss report, even after you record it.
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