how to record donation fees paid by the donor

I'm here to assist you with the transaction fees, mltch5.

You can add the transaction fee on your invoice, you'll have to add another line on the transactions field so you can enter the details and amount.

Let me walk you through the steps:

1. Click on the Plus New icon.
2. Select Send Invoice tab.
3. Select the name of the Customer.
4. Under the transaction details, enter the original invoice amount.
5. Add another line and enter the transaction processing fee amount and indicate it on the description field. Make sure that the account used is under bank fee expense.
6. Click Save and close.

To learn more how credit card processing fee works in QuickBooks, please check out these articles:

• Everything You Ever Wanted to Know About Credit Card Fees.
• A quick guide to Credit Card processing.

Please comment below if you have other concerns about credit card fees. I’d be glad to help you out. Take care.

There is no invoice. Here is the process. The donation comes through a WePay merchant account. In QB I enter a sales receipt for the donor listing the gift and the wepay fee. THe wepay fee was set up as a product/service linked to Bank Fees. Then I make a deposit into bank account, selecting that sales receipt. At the bottom of the deposit slip I subtract the wepay fee in the deposit slip for the respective bank account. That should zero out the wepay fee right? 

Hi there, mltch5.

Thank you for dropping by the Community today. After reviewing your question, you're definitely going to want to reach out to an accountant, this is because they will be able to show you how and where to properly record the fees. If you don't currently have an accountant, you can check out the Find a ProAdvisor website. That's where you can find an accountant who is also a certified expert in QuickBooks. 

In the meantime, I'm also including a few helpful articles for you to check out:

• Track funds you receive from donors. 
• How to record donations or charitable contributions. 

If you have any other questions, feel free to post here anytime. Thank you and have a lovely day. 

Did you ever get a real answer to this workflow, Mltch5?

Did you ever find the answer to your question? I'm in the same situation. I volunteer for a church that does not issue invoices. We recently added the online option for the donor to pay the merchant fee. I'm at a loss on how to document this in QB desktop. It was much easier when the donor didn't pay the merchant fee!

Thanks for reaching out to the Community, WGBCFinance.

I've got a way you may consider doing to record the donation fees paid by a donor in QuickBooks Desktop.

You'll want to create a Sales Receipt then choose Undeposited Funds in the Deposit To drop-down menu, not the bank account.

Then, create a Bank Deposit to the bank account. Here's how:

1. Go to the Banking menu 
2. Select Make Deposits and you will see the amount in full.
3. In the Select Existing Payments section, select it.
4. In the Add New Deposit section of the same deposit, enter the amount of the fee as a negative.
5. Select the bank where you want to deposit the funds.
6. Click Save and Close.

With these steps, your net amount deposit should match what's in your bank feeds.

You can check the deposit payments into the Undeposited Funds account in QuickBooks Desktop for additional information.

Let me know how the steps work for you. I want to make sure you'll get back to business.

Thank you! I'll try this when I go into the church tomorrow. I really appreciate your quick response and shared wisdom.

So I use bloomerang which creates a pledge and syncs with Quickbooks.   If I update that pledge with the merchant fee, that fee does not fall into the right category in my reporting.  It creates a second category in products/services.  I want to match the expense of the merchant fee to the deposit and the pledge when matching in the banking section.  Please advise how to do that or how to get the expense in my general operating expense category not listed under products/services.

Welcome back to the QuickBooks Community, SaraLee22. I'll be sharing details about recording a fee in QuickBooks Online. This is to ensure you'll be able to match your transactions.

Recording bank deposits in QuickBooks Desktop helps you to combine multiple transactions into a single record so QuickBooks matches your real-life bank deposits. Then, some banks add service charges and processing fees. That said, I recommend don't edit the original transactions in QuickBooks rather, making a fee deposit and posting it to the expense account.

Here's how:

1. Go to the Plus icon and scroll down to the Add funds to this deposit section.
2. Enter the fee as a line item.
3. Select who the fee was from (for example, the bank charging you).
4. Select Bank Charges (expense account) from the Account dropdown.
5. Enter the amount fee as a negative number. For example, if the fee was the US $.50, enter –.50.
6. Review the deposit total with the bank fee.
7. Click Save and close.

To see further details on how deposit works in QuickBooks Online, you can open this article: Record and make bank deposits in QuickBooks Online.

Once done, you can now go to the Banking page and review the downloaded entries by matching them to avoid double transactions: Categorize and match online bank transactions in QuickBooks Online.

Lastly, you may refer to this article to view steps on how you can reconcile your accounts so they always match your bank and credit card statements: Reconcile an account in QuickBooks Online.

Don't hesitate to click the Reply button below if you have more questions about managing your entries. I'm always willing to help you out.

How did you end up doing this?  I'm in same situation and could use some help.

Hi there, Hfoster1.

May I know the process you did in QuickBooks and the version you're using? Adding additional details will help us provide the proper steps to resolve this. A screenshot would be a great help too.

I'll keep an eye on your response. Please keep us posted about this. We're always here to help you out.

I use this method when the donor does not cover the cost of the fees (the donor gives $50 but we receive $48.50, I give credit for the $50 and the church pays the fee).  I'm wondering how the process changes if the donor covers the fees (the donor gives $51.50 to cover the $1.50 fee).  They intend to donate $50 and that's what we receive from the bank.  Do I just enter the $50 or do I need to do something else?  I'm a volunteer, untrained bookkeeper so I want to do it the right way!

Thanks for following up with the Community, @BookkeeperCRC.

I'd be glad to help you properly record the donation fees paid by the donor in QuickBooks Online (QBO).

To begin with, you'll have to receive the $51.50 payment and deposit it into the Undeposited Funds. Then, deduct the $1.50 fee from there.

Firstly, receive the invoice payment. Here's how:

1. Select the +New icon and choose Receive Payment.
2. Choose the customer and locate the invoice.
3. Enter the amount received ($51.50).
4. Click the Deposit to drop-down arrow, and then choose Undeposited Funds.
5. Select Save and Close.

After that, deposit the payment and add a line item for the fee. Follow the steps below:

1. Click the +New icon and choose Bank Deposit.
2. Choose the invoice.
3. Under the Add funds to this deposit, add the customer and choose an expense account for the fee.
4. Enter the fee as a negative amount (-$1.50).
5. Click the Account drop-down arrow, and choose the bank account.
6. Select Save and Close.

For future reference, you can check this article to guide you in reconciling your accounts so they always match your bank and credit card statements: Reconcile an account

Please let me know if you have any follow-up questions about recording the donor fees or anything else related to QuickBooks, @BookkeeperCRC. I'll be more than happy to answer them. 

When entered this way doesn't it give the donor credit for the entire amount of $51.50?

Hey there, WGBCFinance. Welcome back!  

Regarding your query, yes, we can definitely follow the process suggested by my colleague @Clark_B in cases where the donor takes care of the $1.50 fee. This means the donor would cover the full amount of $51.50.

For more information on bank deposits in QuickBooks Online, you can check out these helpful articles:

• Deposit payments into the Undeposited Funds account in QuickBooks Online.
• Track funds you receive from donors in QuickBooks Online.
• How to record donations or charitable contributions in QuickBooks Online.

To get a comprehensive overview of the deposits into your bank account, you can run a Deposit Detail report: Record and make bank deposits in QuickBooks Online.

I'll be around to assist you if you have additional queries in recording donation fees, or with any QuickBooks-related matters. We're always eager to support you. Stay safe.