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Experienced Member

Process for Using a Clearing account for credit card deposits

Hi All - 

 

I have a client who does 90% of their business on the weekends. because of this their credit card merchants don't deposit their weekend sales into their account until many days later, however, the total deposits aren't one for one for each day (same in total but broken up into odd amounts). I want to set up a clearing account to do the sales receipts into and then push those to the bank to match to the actual deposit totals. I know how to set up the clearing account (as a bank account) and how to receive the payments to the clearing account. What i'm struggling with is how to set up the actual deposits (and then tie the bank feed items to those deposits) and then clear the clearing account without doubling up in the actual bank account?  THANK YOU

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Best answer 12-06-2018

Accepted Solutions
Established Community Backer ***

Re: Process for Using a Clearing account for credit card deposits

You cannot select from UF as generic amounts; it expects specific transactions that went in to be what went out.

 

Yes, make a bank account for Sales, example:

Sales paid by PayPal go straight into the PP Bank.

Sales paid by VISA and AMEX go straight to your Merchant Account Bank.

Sales paid through Square go straight to the Square Bank.

 

Then, real checking shows Transfers, from Settlement Agent bank to real checking. This is not income, again. Example:

Transfer from Square Bank to Checking, for Square settlement for that date. Then, you also have the provision to enter an Expense Check into the Square Bank for any Square Fees incurred. And you would use their transaction reporting and statement to reconcile, to prove that they are sending transactions and settling to operating bank properly.

 

9 Comments
Established Community Backer ***

Re: Process for Using a Clearing account for credit card deposits

You are way overthinking this. QB provides a default account to use called Undeposited Funds to receive payments into from Receive Payments or Sales Receipts.  Just select this UF account for the sales, then when money is deposited you create a deposit. All of the UF transactions waiting to be deposited will be presented to choose from. And to account for card processing fees you deduct a card fee expense from the deposit items as a item.

Established Community Backer ***

Re: Process for Using a Clearing account for credit card deposits

If you enter the transactions, and use undeposited funds as the holding account, which is really what it is designed for

then you use make deposits, check off the one that add up to the merchant deposit, and deposit to the bank

then banking downloads is a just a match function

Experienced Member

Re: Process for Using a Clearing account for credit card deposits

Thank you. So I've tried this. But with the way my deposits are coming in it's not letting me match to whats in undeposited funds. For example lets say one days sale receipts are 500 on CC and the next day is 400 on CC. Deposits are coming through as 600 on one day and 300 on another. If I pull the sales receipts in to undeposited funds and I try to match the bank feed deposits (or just create a deposit for the 600 on one day and 300 on another) it's not letting me match these to the undeposited sales receipts because it doesn't match one for one. It's giving me an error. 

Established Community Backer ***

Re: Process for Using a Clearing account for credit card deposits

I would not use the UF account, as you get caught up in the futile task of trying to match.  I would deposit the SRs into a bank clearing account, and when the bank deposits come in post them to this account. Then reconcile it once per month

Established Community Backer ***

Re: Process for Using a Clearing account for credit card deposits

You cannot select from UF as generic amounts; it expects specific transactions that went in to be what went out.

 

Yes, make a bank account for Sales, example:

Sales paid by PayPal go straight into the PP Bank.

Sales paid by VISA and AMEX go straight to your Merchant Account Bank.

Sales paid through Square go straight to the Square Bank.

 

Then, real checking shows Transfers, from Settlement Agent bank to real checking. This is not income, again. Example:

Transfer from Square Bank to Checking, for Square settlement for that date. Then, you also have the provision to enter an Expense Check into the Square Bank for any Square Fees incurred. And you would use their transaction reporting and statement to reconcile, to prove that they are sending transactions and settling to operating bank properly.

 

Experienced Member

Re: Process for Using a Clearing account for credit card deposits

So using this process I would do the sales Receipts to the clearing account and then once the deposit hits the bank where would I "match" the actual bank feed deposit to?  

Established Community Backer ***

Re: Process for Using a Clearing account for credit card deposits

The Match for the actual deposit to real checking is "from" that Clearing Bank where you parked the values.

Established Community Backer ***

Re: Process for Using a Clearing account for credit card deposits


@rickerduval wrote:

For example lets say one days sale receipts are 500 on CC and the next day is 400 on CC. Deposits are coming through as 600 on one day and 300 on another.  


There is nothing to match as you yourself see. If you really want to match, call the c/card co and ask them how they determine their payments. Then post the deposits accordingly

Established Community Backer ***

Re: Process for Using a Clearing account for credit card deposits


@rickerduval wrote:

So using this process I would do the sales Receipts to the clearing account and then once the deposit hits the bank where would I "match" the actual bank feed deposit to?  


You don't match in the bank feed; you add