I would use the split poly tool to make the circle then extrude the face inwards, trying to keep the geo all quads, I would then bevel the edge of the circle (at the top and the bottom) making the bavels offset to suit the sharpness of the indent you want. You could use a boolian but it would probably cause more problems, unless you know what your doing with them i.e matching vertexes prior to making the boolian operation.