There are times where you need to reflect a cash back credit on your credit card statement for office supplies, computer equipment purchases, etc. These are called rebates.



Follow these steps below:


1. Best Practice: Reconcile the Credit Card Statement using the reconciliation function in CosmoLex before recording rebate transaction in the credit card account.

2. You need to create a chart of account for Rebates so this can COA is used to when adding rebate transactions to credit card statement and can then be shown in the General Ledger.

  •  Go to Accounting > Chart of Accounts
  • Click Add.
  • In the Add Account window: Create an account number. You can use any account number in the 6400 range since this COA is going to be an expense. For example, 6460, 6461, or 6462. The account name should be called Rebates. Choose Expense as the account type.
  • Click save.
    You will now have created a Chart of Account for Rebates to be used when you need to account enter a rebate transaction in credit card statement.



3. Next, Go to Accounting > Bank > choose credit card account > click details or double click on the bank under the Bank Tab.

  • Under Transaction Tab > Add.
  • In the Add Transaction Window, put in the amount, for type choose: "cc payment", for the payor, put your credit card institution name.
  • In the memo, put Rebate. For Account* choose Rebate which will be the one you created.
  • Click Save.
  • You will see a warning message: "You are allocating outgoing funds to an account which is normally used for incoming funds. Continue?" Click "Yes".


Now, you need to pay the balance on the credit card.


4. Using the operating bank account, (Accounting > Bank > Transaction Tab > Add) enter a check (or if paid electronically, ACH out) for the amount payable to the credit card institution and use Account 2550: Internal Bank Transfer.

You will see a warning message: "You are allocating outgoing funds to an account which is normally used for incoming funds. Continue?" Click "Yes". This will move the money from the operating bank to the holding account "2550:Internal Bank Transfer".

Note: This action does not send the payment to the credit card vendor. You must print the check or use online banking to make the payment.

  • Using the credit card bank account, (Accounting > Bank > Transaction Tab > Add) enter an "ACH in/CC payment" for the amount payable to the credit card institution and use Account 2550: Internal Bank Transfer.
  • This will move the money from the holding account, "2550:Internal Bank Transfer", to pay the Credit Card account within CosmoLex.
  • After this is done, Go to Accounting > Chart of Accounts tab > and search for internal bank transfer COA by account name. Your balance for this chart of account should be zero. If you click the orange arrow to the right of this, you should see a withdrawal from the operating account for the rebate transaction and cc payment towards your credit card account for the rebate transaction.
    You have now successfully accounted for a rebate in your credit card statement.