credit card processing fee transfer from cogs to expense

Let me share some insights about your concerns when transferring credit card processing fees from COGS to expense in QuickBooks Online Accountant, @Charm25.

When transferring the credit card processing fee, changes you make will not affect the transaction records for the closed period. It will only impact the current and future periods. 

You can set up a new expense account for merchant fees and use it as a Category when recording the fee. Here's how:

1. Go to Settings ⚙ and select Chart of Accounts.
2. Click New. Depending on your account view, you'll see a panel labeled New account or New category. Select the option you see below for the next steps.
   
   
    
3. Press Save once done.

Also, I recommend reaching out to your 3rd party payment processor to find out how to do the mapping. 

Moreover, this change may affect your financial statements and tax filings, so it's always a good idea to consult with an accountant or financial advisor before making the transfer or any significant changes to your accounts. If you're not affiliated with an accountant, we can help you find one through this link: Find a ProAdvisor.

You may want to visit these handy articles for future reference to learn more about managing customer payments and personalizing sales forms:

• Customize invoices, estimates, and sales receipts in QuickBooks Online.
• Record invoice payments in QuickBooks Online.

Please get back here in this thread if you have any follow-ups about credit card fees. I'll be around ready to help whenever needed. 

Thank you so much..

Hi there, @Charm25.

You're always welcome. We ensure to answer your queries as soon as possible.

Whenever you have additional questions never hesitate to route back here. We'll be happy to help you. Keep safe, and have a great day ahead!

@Charm25 

I don't think your questions were answered.  

"1. The books until october 2023 were closed, will it affect the transaction records?"

If you change the merchant fee entries before 11-1, it will indeed change your closed periods.  It will move the cost from COGS to Merchant Fees expense.  Net income will be unchanged, however.  You can make a single adjusting entry at each month-end (or each day or week depending on how accurate you want this to be) to move the cost from COGS to Merchant Fees expense.  If you want to do that, create a journal entry: debit Merchant Fees expense and credit COGS on the last day of each month/week/day for the total.     

"2. Should I create new expense account for merchant fees? If yes, my concern is that the 3rd party was mapped to cogs and dont know how to change it."

Ahh, got it.  I guess your options are to create a month/week/day-end journal entry as described above, leave the fees in COGS, or figure out how to change the mapping if possible.  If you can't change the mapping and you definitely want to track the merchant fees as a separate expense, then the month/week/day-end journal entry is really your only option.  

"3. What will be the effect of the transfer?"

It depends on how frequently you make the adjusting entries.  If you make a month-end adjusting entry, then any reports that are run with an ending date other then month-end, will have the merchant fees in COGS.  The same applies to weekly adjusting entries.  It depends on how accurate you want the financial statements to be and how much effort you want to put into making them that way.   

Sorry, what I mean is the books were closed as of year 2022.

When I say transfer is to edit the chart of accounts and change the "save under" from cost of good sold to expense.

Thank you so much for the response. I get your point and make sense..