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GolfNut72
Level 4

Correcting a Credit Card Deposit

I must correct a "duplicate" credit card entry for a client.

 

He created an invoice and accepted a credit card payment or the invoice (not online).  He deposited the funds directly into his bank when he marked the invoice paid.

 

Later when he was updating his bank transactions he accepted a deposit from Square, and the deposit for the invoice, too.  The difference between the two amounts is the merchant service fee.

 

I need to back out the paid invoice and match it to the Square deposit, and I don't remember how to do it.

 

Can someone explain the appropriate steps for me?

 

Thanks

Elliot

 

 

 

 

 

 

 

1 Comment 1
GebelAlainaM
QuickBooks Team

Correcting a Credit Card Deposit

I'll ensure to provide information and guidance in managing credit card deposits in QuickBooks, @GolfNut72.

First off, if you've already marked the invoice as Paid in QuickBooks Online (QBO), you don't need to remove the recorded payment of that invoice. You'll just have to ensure that it was posted to Undeposited Funds.

Next, create a bank deposit deposit and add the fee as a negative line item.
 

  1. Click the + New button, and select Bank Deposits.
  2. Put a checkmark to select the payment you want to deposit from the Select the payments included in this deposit section.
  3. From the Add other funds to this deposit section, enter the amount of the bank service fee charged by the Square app as a negative amount.
  4. From the Account section, select the Expense account you usually use in tracking bank fees.
  5. Verify that the deposit amount is correct.
  6. Then, hit Save and Close to record the transaction.
     

After that, Match the downloaded Square deposit to the recorded deposit in QuickBooks. See this link for guidance: Match online bank transactions in QuickBooks Online.

Then, for the downloaded deposit from the bank, record it as a transfer from Square to that specific bank.

Here's how:
 

  1. Go to the Transactions menu and select Bank Transactions.
  2. Select the bank account where the funds are coming from.
  3. Find and select the transaction to pen it.
  4. Click the Record as transfer button. Then, from the Transferred to dropdown, choose the account where you transferred the funds.
  5. then, select Record transfer.
     

You can check out these articles for additional reference in recording bank service fees while using a third-party merchant service and  a transfer between funds:
 

Furthermore, I'm attaching this article for future reference in reconciling accounts so QuickBooks matches your real-life bank deposits:
 

If you have any other banking concerns, kindly let me know by leaving a comment below. I'm always here to assist you.

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