Statement of Cash Flows - Option to exclude Credit Card accounts from Cash and Cash Equivalents
Credit cards are setup to enjoy the benefit of bank feeds. But under reporting standards they are treated as trade payables. So that means at year end a work around needs to be added. Is there any chance you could setup the report so as to exclude credit cards? For those that need it the work around is
At the core is Xero’s faulty treatment of credit cards.
If we take the approach credit cards are trade payables (as per accounting standards) and not akin to an overdraft, then the work around for the cash flow statement becomes as follows. This is quite straight forward. I’ve tested and it works without any complications that I could find.
If you take this approach there is no need to show the extra lines at cash and cash equivalents/overdrafts, nor change any accounting policies.
- Setup “Credit Card Cash Flow Flag Account” Bank Account – setup but don’t file any forms, nor link any bankfeed. – I gave this account a number 990/01
- Setup a separate chart account “Credit Card Cash Flow Contra Account” Current Liability. – I gave this account a number 990/02
Add a receive money transaction to the new “Credit Card Cash Flow Flag Account” Bank Account – coding the transaction to say Suspense
Add a manual journal – with the cash basis ticked.
DR Suspense CR Credit Card Cash Flow Contra AccountAt a report code level select the same pairing (assuming you use report codes, if not, no need for this step)
Check the balance sheet to ensure these two new codes are grouped together to offset each other.
You would need to repeat for TY & LY
For the avoidance of doubt - the amount you would be journalling (and the receive money entry) is the year end balance of the bank feed credit card/s.
Justine Kennard
shared this idea
Appreciate you raising this idea. We understand the request for more control over how accounts are classified in the Statement of Cash Flows, such as the ability to prevent credit card accounts from being included in Cash and Cash Equivalents.
I’ve updated the status to Gaining Support so we can continue tracking community interest. If this would help your reporting, add your vote and share when you’d find this most useful.
