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Level 1

Is there standard best practice in handling the entry of fees that are charged prior to receiving a deposit? For ex...AirBnB charges me 3% before depositing my payment.

For example...I have a booking that I earned $100 for. AirBnB keeps $3 and deposits $97 into my bank account.

What is the best practice around capturing the total revenue of $100 less the fee of $3? To date, I have manually adjusted each deposit and added a new transaction for the fee to make the net deposit correct.

Is what I am doing right or wrong?
Solved
Best answer November 11, 2019

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Moderator

Is there standard best practice in handling the entry of fees that are charged prior to receiving a deposit? For ex...AirBnB charges me 3% before depositing my payment.

Welcome to the Community forum, skagitsteelheadh. I'm glad to assist about recording processing fees. 

 

Normally, these fees are track on the deposit. Once invoice is created, manually received the payment for the whole amount and deposit it to the Undeposited Funds account.

 

To received the payment, here's how:

  1. On the invoice, click the Receive Payment button.
  2. Select the correct invoice on the Receive Payment screen.
  3. In the Deposit to field, choose Undeposited Funds.
  4. Click Save and close

To enter a bank deposit for the fee, here's what you'll need to do, 

  1.  Click the Plus icon
  2.  Select Bank Deposits.
  3.  Choose the customer payments in the Select Existing Payments section.
  4.  Enter the processing fee as a negative amount in the Add other funds to this deposit section.
  5.  Choose the expense account that you use to track these fees in the Account drop-down.
  6.  Click Save.

This method helps to ensure that customer payments and processing fees are accurately recorded. For an overview of this process, I suggest visiting this article: Enter a bank service fee while using a third-party merchant service.

 

Should you need further assistance with recording transactions, please let me know by commenting below. I'm always around to help you.

View solution in original post

3 Comments 3
Highlighted
Moderator

Is there standard best practice in handling the entry of fees that are charged prior to receiving a deposit? For ex...AirBnB charges me 3% before depositing my payment.

Welcome to the Community forum, skagitsteelheadh. I'm glad to assist about recording processing fees. 

 

Normally, these fees are track on the deposit. Once invoice is created, manually received the payment for the whole amount and deposit it to the Undeposited Funds account.

 

To received the payment, here's how:

  1. On the invoice, click the Receive Payment button.
  2. Select the correct invoice on the Receive Payment screen.
  3. In the Deposit to field, choose Undeposited Funds.
  4. Click Save and close

To enter a bank deposit for the fee, here's what you'll need to do, 

  1.  Click the Plus icon
  2.  Select Bank Deposits.
  3.  Choose the customer payments in the Select Existing Payments section.
  4.  Enter the processing fee as a negative amount in the Add other funds to this deposit section.
  5.  Choose the expense account that you use to track these fees in the Account drop-down.
  6.  Click Save.

This method helps to ensure that customer payments and processing fees are accurately recorded. For an overview of this process, I suggest visiting this article: Enter a bank service fee while using a third-party merchant service.

 

Should you need further assistance with recording transactions, please let me know by commenting below. I'm always around to help you.

View solution in original post

Highlighted
Level 6

Is there standard best practice in handling the entry of fees that are charged prior to receiving a deposit? For ex...AirBnB charges me 3% before depositing my payment.

consider automate it by a 3rd pary property rental app

https://uplisting.grsm.io/uplisting

 

Highlighted
Level 2

Is there standard best practice in handling the entry of fees that are charged prior to receiving a deposit? For ex...AirBnB charges me 3% before depositing my payment.

Hi @skagitsteelheadh, I work for a SaaS company that precisely imports Airbnb reservations into Quickbooks (https://www.bnbtally.com/airbnb/quickbooks/integration). Our customers are primarily accountants who have clients with Airbnbs and wish for more precise accounting. I'll be glad to share how they generally do things.

 

In short, most accountants account for the 3% host fee directly by subtracting it in the invoice created for the reservation. When a reservation income is received from Airbnb, we create an invoice in Quickbooks. Let's say we have a reservation total $100, within the invoice, we break down the following line items...

  • Accommodation Fare: $82.40
  • Cleaning Fee: $20.00
  • 3% Host Fee: -$2.40
  • Total: $100

We do it this way since Airbnb automatically subtracts the host fee from the payment. Each line item goes into it's own Product/Service code that we set up in Quickbooks. For more information about the Chart of Accounts generally used for an Airbnb rental arbitrage business model, I've written an article with templates you can download, which you my find helpful: https://support.bnbtally.com/en/articles/3571867-preparing-quickbooks-for-an-airbnb-rental-arbitrage...

 

For reconciliation, once the money from Airbnb is received into the bank account, the invoice is reconciled with the deposit. Sometimes more than one invoice is reconciled with a single Airbnb payout since Airbnb tends to lump more than one reservation into a single payout. In most cases, our accountants use a payment clearing account to pay the invoice and then transfer the money from the bank account. 

 

Overall, of course there may be more specifics as it pertains to your specific business but I hope this serves as a start to answering your question.  

 

Respectfully,

Jason

Bnbtally: https://www.bnbtally.com/airbnb/quickbooks/integration

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