How to record client payments with fees

Sam De Pasquale · ‎April 06, 2020

I have a client account which is separate from my main account (it's a sub-account)

Please can someone help with the following simple problem

I have a client who has paid £50 through an online vendor to pay their invoice of £50.

£5 of this is deducted as fees so £45 reaches us.

I need to register this transaction as £50 in the client account and £5 as fees but can't figure out how to do this as splitting the payment only allows me to add or subtract from a single account, whereas here, I need to add £50 to the client account and subtract £5 from my checking account to cover the fees.

The other thing I have tried is receiving the £50 into the client account manually and then creating a journal entry where I debit £5 from the checking account and credit £5 to the "Fees" account - however this then shows up as a POSITIVE £5 (unless I specify them backwards...). Is this the only way to do it? I also then have to manually exclude every transaction from the banking tab as it cannot match £50 received when I only receive £45.

Suggestions very welcome.

SarahannC · ‎April 07, 2020

Hello there, Sam De Pasquale.

We can manually create a bank deposit within QuickBooks Online. This way, the £5 as fees will be subtracted from your checking account. We'll have to receive the same amount as 50 and deposit it to Undeposited funds by clicking the Deposit To field when receiving the payment.

Once done, go to the bank deposit page and record the fees by adding a new deposit. We'll need the Received From, Account, Payment Method and Amount. To guide you further with this, please follow the steps below:

Go to +New.
Select Bank deposit under Others.
Let choose an account payable under the Account column.
Enter the total number of fees (£5).
Then, enter -5 under the Amount column. Also, let's make sure that the client's payment and deposited fees are linked to each other. All we have to do is put a check mark next to the client's name. Then, Save and Close.

Let me know if you need anything else. I'm always here to help. Stay safe and healthy!

View solution in original post

SarahannC · ‎April 07, 2020

Hello there, Sam De Pasquale.

We can manually create a bank deposit within QuickBooks Online. This way, the £5 as fees will be subtracted from your checking account. We'll have to receive the same amount as 50 and deposit it to Undeposited funds by clicking the Deposit To field when receiving the payment.

Once done, go to the bank deposit page and record the fees by adding a new deposit. We'll need the Received From, Account, Payment Method and Amount. To guide you further with this, please follow the steps below:

Go to +New.
Select Bank deposit under Others.
Let choose an account payable under the Account column.
Enter the total number of fees (£5).
Then, enter -5 under the Amount column. Also, let's make sure that the client's payment and deposited fees are linked to each other. All we have to do is put a check mark next to the client's name. Then, Save and Close.

Let me know if you need anything else. I'm always here to help. Stay safe and healthy!

Sam De Pasquale · ‎April 07, 2020

Thank you SarahannC

I have two follow up questions if you don't mind.

The first is that I don't understand what you mean by "All we have to do is put a check mark next to the client's name". I can't see anywhere to do that.

The second - this still doesn't allow me to match the transaction in the bank transaction feed. What should I do about this? It seems odd to have to exclude every transaction that comes in this way.

Thanks,

Sam

JenoP · ‎April 07, 2020

Joining in to offer my help, Sam De Pasquale.

The option to put a check mark is on the Bank Deposit window. I've added a screenshot for further details.

Also, it can only be matched if both the downloaded and the transaction in your bank register has the same amount. In this case, you'll need to exclude it since a fee is added to the transaction. Once excluded, you can manually record the transaction or follow the steps that are shared above.

More details about adding or categorizing transactions are discussed here: https://quickbooks.intuit.com/learn-support/en-uk/banking/assign-categorise-edit-and-add-your-downlo....

Please continue to add a reply below if you need anything else.

Sam De Pasquale · ‎May 26, 2021

Hi folks,

Apologies to bump this thread but now I've had a long time to get to grips with QB I wanted to revisit this.

I now understand what is being suggested by the above solution however it doesn't work for the following reason:

I have my current and client accounts as completely separate physical accounts.

The issue with the above is that the client account needs to be credited £50 and not £45.

Essentially what I need to be to be able to do is:

- Match the payment received to:

A) A deposit to the client account of £50

B) An expense to the current account of £5 (or -£5, depending on your point of view)

Using the bank deposit method above, I can only appear to perform this transaction on account or the other.

Is there any way to do this without excluding transactions from the bank feed and adding everything manually? Kind of defeats the point of using accounting software otherwise.

Thanks in advance.

Ryan_M · ‎May 26, 2021

Yes, what you mentioned above is correct, @Sam De Pasquale.

Since these two accounts are separate, you can match the £45 to your recorded transaction in QuickBooks Online (QBO). What you can do next is to toggle the Resolve Difference feature at the bottom of the Match transactions page.

Let's go through the steps:

Highlight the Transactions tab.
Select Banking.
Click the bank account in question.
Under the For review tab, tap on the downloaded transaction you want to match.
Tick the box of the invoice or sales receipt that matches the deposit amount (£45).
Scroll down, then toggle the Resolve Difference option.
Fill in the necessary details such as Date, Payee, Category, and Amount.
When the Resolve Difference amount is 0, press Save.

I'll share this article with you for additional information about this process: Record and make bank deposits in QuickBooks Online. It includes a short video for your reference.

Tag me in a comment below if you have other questions about matching bank transactions in QBO. I'll be around to help you out.

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