This guidance explains how to manage a credit card in Tally. A credit card should be treated as a bank account and always have a negative balance. The negative balance represents the debt that the business owes.
To set up a credit card in Tally start by going to Bank > Add a new Bank Account. Using the options here:
- Account Name – call this account ‘Barclaycard 4440’ or similar. We advise using the last 4 digits of the card number to make it clearly distinguishable
- Starting Date – the starting date should be before the first transaction, i.e. 01/01/1970
- Starting Balance – this should be 0.00
When ready, click Update.
Whenever you make purchases with your card, record it in the usual way by creating a receipt. When recording a payment use the bank account drop down to select this credit card account. Your credit card will go further and further into a negative balance the more it is used, the total balance is the amount due on the card. When you receive your card statements you should be able to reconcile all the entries.
To record a single loan re-payment, click Bank > View/Add Transactions button on the bank screen next to the account that you make the repayment from. Using the fields at the top of the screen enter:
- Date – the date that the money left your bank account
- Comment – a comment such as ‘Credit Card Repayment’
- Type – for ‘Type’ you should select the credit card account
- In/Out – this should be selected as ‘Money Out’ as it’s a repayment
- Amount – the amount to be repaid
When ready, click Add Transaction If you're charged interest on the card, you just add this as a transaction on the bank account. To do this click Bank > View/Add Transactions > Add a new money out transaction with the type as bank charge.