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Level 1
I assume we should record it similar to credit card fees or merchant fees? The commission fee is taken before we are paid. When I receive payment on an invoice, an outstanding amount still remains 'unpaid'. Should I record this commission fee as an expense? How do I categorize this expense properly so a portion of an invoice does not remain unpaid and we are also not held to the full VAT on the whole amount and only on the amount we receive. Hope this makes sense??

Thank you
QuickBooks Team

Hey sbpi,



Thanks for dropping by the community. 


The way we would advise to do this would be to receive the full payment on the invoice to the 'Undeposited funds' account and then pay then record the fee's by creating a bank deposit with the details below.


1) Go to + > Bank Deposit

2) Select the account the money was recieved to and the date

3) Tick the invoice payment (all transactions allocated to undeposited funds will display here)

4) Scroll to 'Add funds to this deposit' and enter an expense account on the 'Account' drop-down, then enter the amount of the fee with a minus figure (e.g. -10.00) in the amount box with no VAT


The total payment deposited should now show the full invoice amount minus the fees.


Please let me know if you have further questions,




Level 1

Many thanks, your response was very helpful. 


I am just a little unsure how to record this commission fee account. How would you suggest I record this expense as? 


Chart of Account > Account type - Expense > 


I am not sure on the detail type? There is no option for commission?


Many thanks

John C
QuickBooks Team

Hi sbpi


It is not essential that the detail type is exact in this instance you can choose bank charges.

Level 2

As the commission is an expense, do we still raise this on the expense account?  I am guessing that when we show the reduced payment received (from the undeposited funds account), this is not registering as an expense?  So we would still raise this in expenses, correct? Thanks.

QuickBooks Team

Hello there, JayC. 


You can post the Commission on a new expense account or to an existing one. We can follow the steps provided by @GeorgiaC on how to receive the full payment on the invoices with the commission posted on the expense account. I've attached a screenshot of the steps provided for your reference as well.


Once you've created the Deposit it'll then post on your sales and expense accounts. We can check the Transaction journal to see the posting accounts. 


Let me show you how: 

  1. Reopen the Deposit
  2. At the bottom menu, click More
  3. Click Transaction journal

If you have other questions you can always reach out to me by tagging my name. Thanks!

Level 1

HI Catherine,


We use QBO US version (Not sure if this is affecting the issue on hand). I followed all steps here, but when I enter negative number in expense to account the commission, QBO says I cannot enter negative number. Not sure what's going wrong. I have attached the screen shot for reference.


Appreciate your help



QuickBooks Team

Hello SB8,


Thanks for getting back to us on this thread. From the screenshot, I can see you've entered this correctly, however, the part which is missing is we should see the invoice payment on this screen to offset the commission against so that the total deposit is still a positive value. 


Do you have an 'Undeposited funds' account which you can post the invoice payment to? 


When you post a payment to undeposited funds, you'll then automatically see this listed when you create a bank deposit, and can tick this to include it in the deposit. 


Get back to us below if you're still having trouble with this!

Level 1

Thanks Georgia, this helped.


I have run into another issue. When I apply payments received from QuickBooks payment - first 'receive payment' then 'bank deposit' along with add funds to 'merchant fees', and then come back to bank feed and try to match the payment for bank statement reconciliation, I do not see the payments in 'Find match' pop up. What must I be missing?




QuickBooks Team

Thanks for getting back to us, SB8,


I can clear things out for you. The following criteria shown below will prevent QuickBooks from matching the deposit to the payment: 


  • Verify that the transaction has not been reconciled.
  • Verify the transaction was entered using the same bank account.
  • Make sure the Quickbooks Online transaction has not been previously matched to another bank downloaded transaction.
  • If it is a deposit or payment received, make sure it is not on the Bank Deposit page (undeposited).

Since you made a bank deposit, you'll want to link it to the invoice. Then, post it to the right bank account when you record the payment. This way, QuickBooks will recognize the entry on your register and will match it to the one in the bank feeds.


To start matching them, the following steps outlined below will guide you through:


  1. Go to Banking from the left navigation bar.
  2. Choose your bank account.
  3. Select the transaction to expand the view. 
  4. Review the Records found. These transactions are ones you already entered in QuickBooks.
  5. Select the link next to each record to get more details.
  6. Review the Deposit to field on the forms.
  7. Your transaction in QuickBooks is already in the account listed.
  8. When you’re done, select Match.

After you match or add, downloaded transactions are recorded to your accounts in QuickBooks. The record reviewed from your bank goes to the Reviewed tab.


Check out this page for more details about the steps provided above: Categorize and match online bank transactions in QuickBooks Online.


Stay in touch if you have follow-up questions. I'm always right here to help.

Level 1

Thank you! That works