Taking card payments when the fee is charged before payment

Ritchiec80 · ‎November 20, 2020

As part of my business I send a lot of invoices that are often paid in 2 parts, currently I use First Data for card payments which means that when someone pays their invoice via card the full amount is paid into my account so I can add it to the invoice via Quickbooks, the fees are taken monthly on all card sales.

I'm looking to switch to either iZettle or Sumup but these companies take their transaction fee before they pay you you meaning if I take £100 they might pay me £97.50 or something like that, my question is how can I track this as if I add that against the invoice it will show as £2.50 being outstanding.

How can I track this to keep the tax man happy and avoid confusion on who owes what.

Jen_D · ‎November 20, 2020

Thanks for joining the conversation, @Ritchiec80,

I can share the steps on how to handle bank or credit card fees in QuickBooks Online.

This process may require a few steps to do, so I'll be outlining everything for you.

Step 1: Create the customer invoice. In your case, the $100 receivable.

Click the Plus (+) icon.
Select Invoice.
Enter the exact amount to be invoiced. (See screenshot below)

Step 2: Receive the full payment of $100. This is to replicate the amount taken from the customer and the income in your Profit and Loss.

On the invoice, click the Receive Payment button.
Select the correct invoice on the Receive Payment screen.
In the Deposit to field, choose Undeposited Funds.
Click Save and close. (See screenshot attached)

Step 3: Enter a Bank Deposit for the fee to relieve the balance from Undeposited Funds account to bank account. This process is important, because here we deposit the amount cleared in the bank after deducting the fees.

Click the QuickBooks Plus (+) icon.
Select Bank Deposit.
Mark the invoice payment you received previously from the Select the payments included in this deposit section.
Expand the Add funds to this deposit section to add a new line item.
In the Received From column, enter the credit card fee as a vendor.
In the Account column, add an expense account for the fee.
In the Amount field, enter a negative fee amount. Example, -2.50.
Make sure the deposit matches the net bank deposit amount.
Click Save and close.

Please let me know if you need further assistance with recording fees. I'll be available to help you anytime. Have a great day!

View solution in original post

Jen_D · ‎November 20, 2020

Thanks for joining the conversation, @Ritchiec80,

I can share the steps on how to handle bank or credit card fees in QuickBooks Online.

This process may require a few steps to do, so I'll be outlining everything for you.

Step 1: Create the customer invoice. In your case, the $100 receivable.

Click the Plus (+) icon.
Select Invoice.
Enter the exact amount to be invoiced. (See screenshot below)

Step 2: Receive the full payment of $100. This is to replicate the amount taken from the customer and the income in your Profit and Loss.

On the invoice, click the Receive Payment button.
Select the correct invoice on the Receive Payment screen.
In the Deposit to field, choose Undeposited Funds.
Click Save and close. (See screenshot attached)

Step 3: Enter a Bank Deposit for the fee to relieve the balance from Undeposited Funds account to bank account. This process is important, because here we deposit the amount cleared in the bank after deducting the fees.

Click the QuickBooks Plus (+) icon.
Select Bank Deposit.
Mark the invoice payment you received previously from the Select the payments included in this deposit section.
Expand the Add funds to this deposit section to add a new line item.
In the Received From column, enter the credit card fee as a vendor.
In the Account column, add an expense account for the fee.
In the Amount field, enter a negative fee amount. Example, -2.50.
Make sure the deposit matches the net bank deposit amount.
Click Save and close.

Please let me know if you need further assistance with recording fees. I'll be available to help you anytime. Have a great day!

TraceyGoldman · ‎December 16, 2020

This explanation is a LOT of work to do daily and then split across multiple invoices.

There must be a more simple approach to associate the fee to an expense account called SumUp.

Ashleigh1 · ‎December 16, 2020

Hello Traceygoldman,

Thanks for posting on this thread,

The steps above in this post are how to record the transactions in Quickbooks, there is no other way to record them in your account.

peterbooth

This doesnt allow me to match the bank transaction with anything.

Rasa-LilaM

Keeping track of transactions clearly and accurately is essential for organizing your financial records, peterbooth. This helps make the matching process and account reconciliation easier. Let me guide you in the right direction on how to resolve your concern.

First off, can you clarify which transaction type you’re trying to match to the bank entry? Have you encountered any error messages along the way? Any extra details will help ensure I can give you the best solution for your issue.

QuickBooks Online (QBO) reviews your bank data to find matches, rules, and recognized transactions. While you go through the data, you can compare the online banking transactions with the ones already in your company.

Furthermore, some entries might not be able to locate a match within the existing records due to various factors:

The amounts or dates don’t match.
The transaction is older than 6 months.
The bank account on the payment isn't the same as the bank where the match is located.
The payment has been reconciled.
The record is already matched to another transaction.
There are multiple currencies involved, and the exchange rate has shifted significantly, making the amounts very different.

If you received less than the invoice amount due to bank fees, enter the fee as a negative amount on the Bank Deposits. This ensures your register matches the bank statement.

Here's how:

In your company, head to the + New menu in the upper left and pick Receive payment.
Enter all the payment information and tick the box next to the invoice you'd like the payment to be applied to.
Choose Undeposited funds from Deposit to ▼ dropdown and click the Save and close button to keep the entry.

To add the fee:

Navigate to the + New menu in the upper left and select Bank deposit.
You'll be able to see the payment entered in the Select the payments included in this deposit section at the top.
Put a check to select the payment you want to deposit.
From the Add funds to this deposit section, enter the amount of the bank service fee as a negative amount.
From the Account section, select the Expense account used to track your bank fees.
Verify that the deposit amount is correct.
Click the Save and close button once done.

After performing these steps, tick the Match function to open the Find other matches screen (look for other possible entries). If the amount doesn't match, you can resolve the difference between the invoice and the payment by performing these steps:

Navigate to Transactions menu on the left panel and choose Bank transactions.
Pick the account you're working on.
In the For review tab, select the entry and tick the Match radio button to open the Find other matches screen.
From there, check the box next to the correct invoice.
Select the Resolve option to display the Add resolving transactions section.
From the Category drop-down, select the bank fees expense account and input a negative figure in the Amount column.
Click the Match button.

For future reference, explore this article for guidance in balancing your bank and credit card accounts: Reconcile an account in QuickBooks Online.

Feel free to comment below if you need more guidance on a specific accounting task in QBO or have any banking questions. I’m here to provide the support you need.

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Taking card payments when the fee is charged before payment