Setting Up Parent and Child Credit Card Accounts in QuickBooks Online: A Step-by-Step Guide

10/16/20243 min read

Setting up credit card accounts correctly in QuickBooks Online (QBO) is essential for smooth and accurate bookkeeping, especially if you’re working with multiple credit cards under a single account (often called “parent and child” accounts). If set up incorrectly, it can lead to duplicate transactions, reconciliation issues, and confusion. In this post, we’ll guide you through the correct steps to set up parent and child credit card accounts in QBO, connect them to the bank feed without duplicating entries, and reconcile them accurately.

Understanding Parent and Child Credit Card Accounts

In QBO, a parent account is the main credit card account, while child accounts are individual cards issued under the same account (often used by different employees or departments). Each child account rolls up into the parent account, meaning all balances are ultimately reflected on the parent account.

Step 1: Setting Up the Chart of Accounts

To start, set up a parent account and individual child accounts for each card:

Go to Transactions > Chart of Accounts > New.
Account Type: Choose Credit Card.
Detail Type: Select Credit Card.
Name: Name the main account as the parent account (e.g., "Corporate Credit Card - Parent").
Is sub-account: Leave unchecked for the parent account.
Save and close.

For each individual credit card (child account):

Go to Transactions > Chart of Accounts > New.
Account Type: Select Credit Card.
Detail Type: Choose Credit Card.
Name: Name each child account accordingly (e.g., "Corporate Credit Card - Employee A").
Is sub-account: Check this box and select the main parent account.
Save each child account.

This setup organizes transactions by each individual card while consolidating all balances under the parent account, which will make reconciliation and reporting simpler.

Step 2: Connecting the Bank Feed Correctly

When connecting your accounts to the bank feed, only connect the child accounts to avoid duplicate transactions. Here’s why:

If you connect both the parent and child accounts to the bank feed, QBO will pull in transactions twice – once from the child accounts and again from the parent account. To avoid this, connect only the child accounts, and transactions will automatically flow up to the parent account.

Go to Transactions > Bank Transactions > Connect Account.
Select each individual child credit card account to connect.
Do not connect the parent account to the bank feed.
Complete the connection setup for each child account.

By only connecting the child accounts, you ensure that all transactions are imported without duplication.

Step 3: Reconciling Parent and Child Credit Card Accounts

Reconciling credit card accounts in QBO can be done effectively by first reconciling each child account to zero and then reconciling the parent account. Here’s a step-by-step process:

3.1 Reconciling Each Child Account

Go to Transactions > Reconcile and select each child account individually.
Reconcile to $0.
Any remaining balance will be transferred to the parent account.

3.2 Transferring Balances to the Parent Account

After reconciling each child account to zero, transfer the balances to the parent account by creating a journal entry. Whether you record the transfer as a debit or credit for each child account depends on the balance’s positive or negative sign.

Go to + New > Journal Entry. (*)
For each child account:
- If the child account balance is positive (credit), record it in the Credit column of the journal entry.
- If the child account balance is negative (debit), record it in the Debit column of the journal entry.
In the Opposite Column (Debit or Credit) of the journal entry, enter the total amount under the parent account.
Save and close.

This step consolidates the reconciled balances from each child account under the parent account, so when the parent account is reconciled in Step 3.3, it reflects the correct total balance.

(*) You can also use the Transfer feature in QBO instead of a journal entry for this step, which may simplify the process and help avoid any errors.

3.3 Reconciling the Parent Account

Go to Transactions > Reconcile and select the parent credit card account.
Enter the statement ending balance from your parent account credit card statement.
Reconcile the transactions to match your statement.

By reconciling the child accounts first and then the parent account, you ensure each transaction is accounted for without duplication, maintaining accurate records.

Why Proper Setup Matters for Your Business

Setting up and managing parent and child credit card accounts properly in QuickBooks Online not only prevents duplicate transactions but also provides a clear view of expenses by cardholder or department. This structure simplifies month-end reconciliations and ensures accurate reporting. Properly tracked and reconciled accounts give you a reliable snapshot of your business’s financial standing, supporting sound financial management and informed decision-making.

Let Us Help You Manage Your Credit Card Accounts

Setting up parent and child credit card accounts in QuickBooks Online is essential for accurate expense tracking and financial reporting. At Veslav Consulting, we specialize in QuickBooks Online cleanup and bookkeeping services for small businesses. If you need assistance organizing your credit card accounts, reconciling statements, or managing employee expenses, our team of experts is here to help.