how do I record paying off my credit card from the bank
Paying off a card isn't an expense: it's a transfer between two of your own accounts. The money leaves your chequing account and reduces what you owe on the card.
This trips people up because it looks like money going out, so it gets coded as a cost. But the expenses already happened when you bought things on the card; recording the payoff as an expense counts them a second time and inflates your costs for the month.
Mark the bank transaction as a transfer to the card account. The result is your chequing balance drops, the card balance drops by the same amount, and nothing at all hits your profit and loss, which is correct, because nothing was spent at that moment.
The same logic covers moving money between any two accounts you own: chequing to savings, owner contributions in, a card payment out. If both sides of the movement belong to you, it's a transfer, not income or expense.
Answered by the Talisk HQ assistant, reviewed by us
Also asked
- a transfer moved money from checking to my credit card, how do I book it
Ask a bookkeeping question
Can't find it? Ask. We answer real questions from real Canadian small businesses