Entering your charges provides you with a more complete picture of your spending habits. Charges on a credit card are tracked as a transaction between the credit card liability account and the appropriate expense account.

When you swipe that credit card through the machine at a store, you are transferring money from your credit card company to that merchant. This transaction increases the amount of money you owe the credit card company. If you keep track of these types of transactions, you can reconcile your credit card account with your monthly statement, and you should quickly spot any transactions that look suspicious. So how should you account for charges to your credit card?

One way is to manually enter all your receipts, either throughout the month or all at once. This can be time-consuming, but it is probably the best way to make sure that all of your charges are authorized. If you consistently enter all your receipts, you can quickly catch any errors or unauthorized transactions during your monthly reconciliation.

Another way is to import a credit card statement directly into your account. If your credit card company supports a QIF file format for its statements, you have the option of directly importing the statement. This type of import is covered in the chapter The Basics, and it is a convenient way to track your purchases without having to manually enter all your receipts.