I just got a new credit card that gives me cash back, a percentage of the money I spend. When I imported the refund transaction into QuickBooks, I was at a loss as to where to put the rebate. A little web research brought up two approaches for recording credit card cash rewards in QuickBooks.
1. Offset an Expense
For example, if you take a trip and spent a lot on airfare, you can apply the reward refund to that same travel expense category that you originally used for the transaction. You can even split the transaction into multiple expense accounts. The problem with this approach, though, is that at year-end you don’t have a true analysis of your expenses because it looks like you spent less than you did.
2. Create a New Other Income Account
Any cash back or statement credits you get on your credit cards go here. It classifies the refund as Income, but it still stays outside your Gross Receipts so it doesn’t impact your revenue analysis.
