Moreover, many credit cards offer all kinds of rewards including cash back. By using your credit card, you can also reduce bank fees related to the issuance of cheques to suppliers while saving postage expenses.
Travel agencies mostly use the cheque payment methods with travel vendors when the customers themselves pay by cheque or in cash. For travel agencies that are physically far away from their travel suppliers’ locations, the postage deadlines may also be at a disadvantage in view of receiving travel documents. For that particular reason, some travel vendors do not accept cheque payments anymore when the deadline is too short between the reservation and the departure.
To benefit from the advantages mentioned above, it is important to make your entries properly in TravelWorks. I have been using the methodology described below for more than 10 years and it highly facilitates data entry and transaction monitoring, whether the transactions are related to travel vendors or administrative suppliers!
First of all, you need to create a General Ledger as a bank to set up your credit card.
1) Create a General Ledger as a bank to set up your credit card:
Quick menu – System configuration – Chart of accounts
You will have to create a ‘’Visa’’ General Ledger. Important to choose the ‘’Asset’’ category, the ‘’Current assets’’ group and the ‘’Cash’’ sub group. Make sure that you select the ‘’Asset’’ category! Otherwise, it will be impossible to select this item when creating the bank account in step 2.
2) Create the bank code:
Quick menu – System configuration – Bank accounts
You need to create the new bank account by using an available bank code. For example, 003, Visa, GL Account: Name of the bank account you created in step 1.
You are now ready to enter the transactions that are listed on your credit card account statement.
What do you do if a customer pays you in cash or by cheque?
When invoicing:
You create your invoice the normal way. For a customer payment, you register the genuine customers’ revenues by cheque or in cash.
When paying this file to the travel vendor:
It is best to enter transactions in TravelWorks as payments are made to travel vendors. Alternatively, you can enter transactions in TravelWorks when receiving your monthly credit card statement of the account. With this 2nd method, it is important to efficiently monitor transactions made by credit cards to be able to quickly find in which files credit card payments have been processed.
Quick menu – Accounts payable – Travel payments
You select the vendor to whom you sent the credit card payment . You select the related file from the list and you enter the payment amount. It will be then necessary to enter a cheque number. The easiest way to do so is to use the customer file reference number generated in TravelWorks (for example D0004). You can use any other numbering method as long as you define a logic for an easy follow up. If possible, pay to the travel vendor the ‘’net’’ and not the total amount paid by the customer.
Bank reconciliation for a Visa credit card account
You received your credit card statement of an account! It is now important to proceed with the reconciliation. The reconciliation allows you to track transactions present on your credit card statement that would not have been authorized.
It’s an excellent way to discover possible mistakes! (for example, failure to generate the customer’s invoice if we omit the registration of the credit card payment transferred to travel vendors when the customer paid).
Quick menu – Accounting operations – Bank reconciliation
You need to select ‘’003-Visa’’ bank.
It is important to enter the credit card balance mentioned on the statement of the account. In our particular example, there is only one transaction and the credit card balance is 1,338.16 $. As it is an account payable, enter the balance of the statement of the account in negative (- 1,338.16 $). Subsequently, just check the transactions in TravelWorks that are found on the credit card statement of the account. Once all transactions are checked, the balance will appear with 0.
Pay credit card
The credit card payment is now due. You will then perform the following two steps to enter the disbursement from the bank account used to pay the credit card.
A) How to make a credit card payment?
Quick menu – Accounts payable – Administrative
Use an administrative supplier to assign the purchase in the 20130 account (transfer) and the cheque (or bank transfer) to the right bank account.
B) How to cash payments on a credit card?
Quick menu – Accounts receivable – General receipts
Enter a ‘’general Receipt’’ with 20130 GL by selecting the same date as the one on the statement by assigning it to the ‘’003-Visa’’ bank.
For those of you who are more experienced, you can replace the previous two steps by a journal entry for the bank account where the money comes from and the payment applied to the Visa account.
By doing this, please note that the amounts to deposit on the Trust Account (according to the Quebec legislation) will disappear from the In-Trust report once credit card travel disbursements are made.
Therefore, it will be important to transfer money from the Trust account to the current account and then to make a payment to the travel agency’s credit card.
We do not recommend making credit card payments directly from the Trust Account.
By François Lacoste, CPA, active user of TravelWorks software