You can record gift cards in QuickBooks Online (QBO) by creating a liability account called "Gift Card Liability." Here's how:
1. Create a Liability Account
- Go to Chart of Accounts.
- Click New.
- Select Liability from the Account Type dropdown.
- Enter "Gift Card Liability" as the account name.
- Click Save.
2. Record Gift Card Sales
- When you sell a gift card, create a sales receipt.
- Select the "Gift Card Liability" account as the income account.
- Enter the gift card amount as the amount.
- Do not include sales tax.
3. Track Gift Card Redemptions
- When a customer redeems a gift card, create a sales receipt.
- Select the "Gift Card Liability" account as the liability account.
- Enter the amount of the gift card redemption as the amount.
- Do not include sales tax.
4. Reconcile Gift Card Liability
- Regularly reconcile the "Gift Card Liability" account to ensure the balance reflects the outstanding gift card value.
- This involves comparing the account balance to the actual gift cards sold and redeemed.
Examples
- Gift card sale: A customer purchases a $50 gift card. You create a sales receipt with "Gift Card Liability" as the income account and $50 as the amount.
- Gift card redemption: A customer uses a $50 gift card to purchase goods. You create a sales receipt with "Gift Card Liability" as the liability account and $50 as the amount.
Practical Insights
- It's important to clearly distinguish between gift card sales and gift card redemptions.
- Recording gift card sales as income and redemptions as a liability ensures accurate accounting.
- Regular reconciliation of the "Gift Card Liability" account helps identify any discrepancies and maintain accurate records.
