Last Updated on December 9, 2020 by Editorial Staff
Have you got a cash back rewards in QuickBooks? If so, then congratulation, you have received an amount of income to your account. But, now after getting the cash back rewards the topic arises of how to record cash back rewards in QuickBooks or how to show this in the QuickBooks transaction. To make this process simpler, Accountwizy is here with the article to record the cash back rewards.
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- Two Things Needed to Record Cash Back Rewards
- How to Record Cash Back Rewards in QuickBooks
- Procedure to Categorize QuickBooks Cash Back Rewards
- Issues Faced by Users While Recording Cash Back Rewards in QuickBooks
- Final Words
Two Things Needed to Record Cash Back Rewards
This procedure will done be done in just two simple things, and they are offsetting of expenses, and creating of new income account, which are also given in the below. But here in this article, we have described the full procedure in the next section to simplify the procedure.
Offsetting of Expenses
If you take a trip and spend a lot on the fare, you can apply the reward refund to the same travel expense category that you originally used for the transaction into multiple expense accounts. The main problem associated with this approach is that at the end of the year you won’t have the correct analysis of the expenses because it looks like you spent less than you did.
Creating of New Income Account
The statements of credits or cash back that you get on the credit cards of yours go here. Refund is classified by income, but it won’t be a part of the gross receipts, hence it can not have any impact on the revenue analysis.
How to Record Cash Back Rewards in QuickBooks
Record the cash back rewards in QuickBooks as a credit card by following the below procedure. The QuickBooks Online, Desktop, and Pro users can follow the same procedure to record the cash back rewards. Here you go for the procedure, and complete the three steps without skipping any single step:
Step 1: Create an Income Account
In the first step, you need to create an income account, you can follow the below procedure to create the income account.
- Open QuickBooks, and go to the ‘Accounting’ section.
- From there, select the ‘Chart of Accounts’ option, and click on the ‘New’ option to select the Income.
- You can select your income, in the ‘Account Type’ section.
- Consult with your ProAdvisor or accountant for the appropriate detail type.
- In the relevant field, enter the account name, and save all the changes that you have done.
- Lastly, close the tab.
Step 2: Create Credit Card for Cash Back Rewards
In the second step, you need to create a credit card for cash back rewards:
- Go for the (+) sign to create.
- From the top of the menu, choose the ‘Credit Card’ option, and the ‘Payee’ option.
- Put the credit card account, and the information related to the account.
- Put other income, and the other, that you have created under the columns of account field.
- In the next step, enter the cash back amount, and save all things.
- Lastly, close the tab.
Step 3: Record the Cash Back Credit Rewards
Finally, we are in the last step, you need to complete this step to complete your task.
- Open QuickBooks, and go to the ‘Banking’ section.
- There you can see the option of ‘Credit card Charges’, just click on it, and go for the ‘Purchased’ Filed.
- Enter the name in the field, and select the created account.
- Again put the charge amount, and save all things, that you have done till now.
- Close the tab
Finally, you have recorded the cash back rewards in QuickBooks.
Procedure to Categorize QuickBooks Cash Back Rewards
QuickBooks allows its users to categorize all its cash back rewards on QuickBooks Self-Employed. The cash back rewards are not the part of the business income, so it is easy to categorize all the downloaded transaction in your PC without any restriction. Here you go for the list, see what can you categorize in it:
- Assets, Supplies
- Commission & Fees
- Business Income
- Personal Deposit & Withdrawal
- Interest paid
- Home Office, Office Expenses
- Taxes and Licenses
- Rent and lease
- Other Expenses of Business
Issues Faced by Users While Recording Cash Back Rewards in QuickBooks
Sometimes some issues create problems to record the cash back rewards, due to various reason, here we have mentioned some of the situations, as well as the issues, read, and you can understand them easily.
- Whenever a user has no idea that, where the money was spent, at that time, you will get the issue, what expense will be used for the amount of cash back on the credit card or debit card and what can be written in the field of description.
- And whenever a user uses a credit card to get the cashback when he/she pay for the same credit card, at that time, the user has no idea that how the cash back is going to be recorded in the QuickBooks.
Thank you for connecting with us till the end of the article. We tried our best to describe all the details to simplify the procedure. Hope, you like the blog, and now you are able to record the cash back rewards in QuickBooks. If in case, you face any problem while recording the rewards then you can get the help of our QuickBooks ProAdvisor for the instant troubleshooting solution.