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Suspense Account for Credit Card Payments

Let's talk about suspense accounts for credit card payments. I recently came across this from a client of mine, and I wanted to share this with you. I think it's a great little tool, a great little work-around. The main thing about this is continuing your flow of work. Bookkeeping is about getting a lot of transactions posted in the most accurate, efficient, and effective manner. Using a suspense account is tremendously helpful. I'm going to show you how.

Let's identify the problem. Suppose you are posting bank transactions from QuickBooks Online in the Banking section. There are multiple credit cards under the same credit card provider. For example, let's say you're working on a set of books and this particular business has Chase credit card: not one, but two credit card accounts, both from Chase Credit Card. Let's say one is Chase Freedom and another is Chase Sapphire.

Payments are made to these credit card accounts, but posting payments to the correct account may be difficult, especially when back posting, meaning your posting payments after they've happened. You don't want to slow down and break the flow of work. Later on I'm going to show you how that actually it looks like in QuickBooks online.

For example, a bank detail for the payment says CHASE CREDIT CARD AUTOPAY, but there is no detail on which credit card the account is for. If you're going through the QuickBooks Online banking syncing menu, you're seeing a slew of transactions from the bank account.

Within there you'll see payments going out to Chase Credit Card for X amount of money on a certain date, but you have no idea which credit card it's going for. There's a good chance of that you can misapply the payment, since you can't really know, given the information at hand. You could stop and review the credit card statement or review the downloaded transactions for that credit card, but that will stop your flow of batch-posting transactions.

I don't know why, but maybe it's not just me. Maybe it's just human nature. I've heard this from other accountants and bookkeepers, that when you're in the flow of a certain category, certain sub-category, you're working on the checking account and you're trying to get all of these transactions from the syncing feature to be posted into the books. You don't want to stop or slow down. That moment, that workflow, being in the zone is golden, so you want to do whatever it is that you can to keep that flow going.

Later on as you reconcile the credit card statements, you're finding errors on the payments posting, namely being applied to the wrong accounts. This is frustrating, naturally. It feels like the work is brought to a complete halt, which is the worst thing. You just want to pull your hair!

Introducing the suspense account. Don't be afraid of the name. According to, an excellent resource for learning accounting concepts, both basic and advanced, the definition is as follows:

A suspense account is a general ledger account in which amounts are temporarily recorded. The suspense account is used because the appropriate general ledger account could not be determined at the time that the transaction was recorded.
As soon as possible, the amount(s) in the suspense account should be moved to the proper account(s).

Suspense account works exactly according to its name. The account holds transactions in suspense. They are there only temporarily. It's not their home. It's not going to be it's home. It's not intended to be its home. It's meant to be a hotel of storage for transactions.

Let me show you how this exactly looks like in QuickBooks online. Here we are at my Purely For Testing Inc business. We are now going to go to the Banking window, and here we see the business Checking account with a handful of pending transactions waiting to be posted. The only transactions that I want to highlight are the Chase Credit Card Autopay. You can see that they're made on the same day each month. That's what this business owner likes to do. It's Autopay, so it's just scheduled to go out and we have no idea which account it's for.

Now, we can always log onto the Chase website, go through the transactions, maybe even sync it to QuickBooks online here, look at the statements. But again, that breaks up the workflow and we still have to work all these transactions sitting here.

Instead of trying to figure out the right credit card account, whether it's Chase Freedom or Chase Sapphire, we're going to avoid that whole can of worms and we're going to create a Suspense Account. It's good anywhere on the balance sheet. I like to put it as Other Current Assets. Current assets are something that should be alleviated soon. It's definitely not a long-term asset.

If you want to be more specific, you could say Credit Card Payment Suspense. This just completely solves your problem. You don't even have to think about it. Even QuickBooks is realizing the pattern here. "Hey, we're see a credit card payment, it says Chase Credit Card Autopay. We're going to put that to credit card suspense. Would you like to do that?"

Add that, and of course it's going to start asking for a rule. Now you don't have to look up which credit card it's going for. Boom, it's going to the suspense account. Kapow, get it done. Move on, enjoy life. All right?

Don't fear the suspense account. Bookkeeping in batches is extremely helpful for productivity, accuracy, work satisfaction. It gets you in the flow, especially if there are a lot of transactions to post. A suspense account removes the time and energy spent on problem-solving and cross-referencing, along with the time and energy to get restarted in the batch posting process. Imagine if you're going through the bank transactions and you have to flip over to the credit card transactions, then you have to flip back. It takes a reboot of the mind. It takes a refocus of the mind. That's just human nature, I guess. I hear that problem so often with a lot of different jobs, actually.

Make sure you apply credit card payments from the suspense account not from a bank account, so that those entry transactions in that suspense account can wash each other out. When you go back to clean out that, however often it is, whether you're going to clean it out every week, every month, every quarter, every year, however that's appropriate to that business. That's the most important part at the end. That's how you know, you're using that suspense account properly, because you're seeing all these lovely debits and credits coming in that cancel each other out.

My name is Thomas Kim, senior bookkeeper at Tabular LLC here in New York City. Drop me a line if you have any more questions, or if you're an accountant, a CPA, who needs help in terms of cleaning up the books for one of your clients, or if you're a small business who could use my advice. My email is and my mobile is 917 588 1182. Thank you.

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