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Han2
Level 1

Recording square fees

Hi Everyone

Some of my customers pay their invoices via the 'Square' system....however, when the payment arrives in my account from Square, it has taken out a percentage for it's fees, and so it no longer matches the original invoice price.

How do I record this accurately? For example, the original invoice was for $221, but Square took out a fee of $4.86, meaning that I only receive $216.14 in my account to match against the invoice, and so Quickbooks still thinks that my customer owes me money and their invoice is still outstanding!

 

Please advise how I resolve this issue, and how I can record it accurately each time this happens.

Thanks

3 Comments 3
Rejeil_O
QuickBooks Team

Recording square fees

Hi there, @Han2.

 

Let me help you record your invoice from your Square system. You can create a service item and name it into "Square Fee's" in your QuickBooks Online account and link that item to an expense account. So, once you enter an invoice transactions from the square, you can include the square fee's in the item line.

 

Let me walk you through the steps on how to create an item. Here's how:

 

  1. Go to the Sales tab, then select Products and Services.
  2. Click the New button, and choose the Service option.
  3. Name the item (Square Fee's), and enter the SKU's (Optional).
  4. From the Category field, select the category that best describes the service. Learn more about the item category.
  5. Click the I sell this product/service to my customer to remove the income account on the item.
  6. Put a checkmark in the box beside the I purchase this product/service from a vendor.
  7. Add the description.
  8. Enter the Cost of the service (Square fee's).
  9. Click the Expense account dropdown arrow, and select the account that fits your service item.
  10. On the Preferred Vendor field, enter the Square system as a vendor.
  11. Click Save and Close.

For more detailed information, you can read this article: Add product and service items to QuickBooks Online.

 

Once done, you can use the Sales by Product/ Service report to track the service item. Just customize the report to pull up the specific statement you want to show.

 

Fill me in if you need more help by leaving a comment below. I'll be around in the Community to help. Take care and have a great day!

Han2
Level 1

Recording square fees

Thank you for your assistance

I followed the steps that you outlined, but because it is an expense account that I set up, it won't allow me to choose it as a line item on the invoice because it requires an income account


@Rejeil_O wrote:

Hi there, @Han2.

 

Let me help you record your invoice from your Square system. You can create a service item and name it into "Square Fee's" in your QuickBooks Online account and link that item to an expense account. So, once you enter an invoice transactions from the square, you can include the square fee's in the item line.

 

Let me walk you through the steps on how to create an item. Here's how:

 

  1. Go to the Sales tab, then select Products and Services.
  2. Click the New button, and choose the Service option.
  3. Name the item (Square Fee's), and enter the SKU's (Optional).
  4. From the Category field, select the category that best describes the service. Learn more about the item category.
  5. Click the I sell this product/service to my customer to remove the income account on the item.
  6. Put a checkmark in the box beside the I purchase this product/service from a vendor.
  7. Add the description.
  8. Enter the Cost of the service (Square fee's).
  9. Click the Expense account dropdown arrow, and select the account that fits your service item.
  10. On the Preferred Vendor field, enter the Square system as a vendor.
  11. Click Save and Close.

For more detailed information, you can read this article: Add product and service items to QuickBooks Online.

 

Once done, you can use the Sales by Product/ Service report to track the service item. Just customize the report to pull up the specific statement you want to show.

 

Fill me in if you need more help by leaving a comment below. I'll be around in the Community to help. Take care and have a great day!


 

Catherine_B
QuickBooks Team

Recording square fees

I do appreciate the steps you've performed to add the fees on your invoice, Han2. 

 

We can receive a payment on the invoice without the square fees. Then, we'll deposit the payment to Undeposited Funds. When we create a bank deposit, we'll add the expense account used in tracking square fees. I'll show you how: 

  1. Open the existing invoice amounting to $221. 
  2. Click the Receive payment button at the upper-right.
  3. From the Receive payment page, select Undeposited Funds under the Deposit to drop-down. 
  4. Select the invoice and review the Amount Received. Then, click Save and close
  5. Go to the +New button and select a Bank deposit
  6. Select the invoice payment you just recorded. 
  7. Under the Add funds to this deposit section, select the customer's name, expense account used in tracking fees, and then enter a negative amount for the square fee ($-4.86) under the AMOUNT field. 

The amount total to deposit is now $216.14 which you can match to the customer's actual payment. 

 

You can always leave a reply below if you need more help. Take care and have a nice day!

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