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Invoices & Credit Card Sales

I am using a 3rd party POS system for my Retail Sales location.  I do not want to use the available app to connect to QB as I want to keep it simple.  Our credit card transactions are sent by direct deposit to our bank account with the fees already deducted.  I want to be able to account the daily sales total and the fees expense correctly.  I had thought about using an invoice same as I am doing for daily cash receipts but the "payment" I receive is less due to the fee deduction.  What do you suggest I do?  I already have deposit transactions in my Bank Account Register, so I am at a loss.

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Invoices & Credit Card Sales

How are you currently entering in the Sales from your POS system into QuickBooks?  Are you entering the Credit Card and Cash Sales shown by your POS system?  As well as Sales Tax?  Or for your Credit Card Sales are you just entering in your the sales that hit the bank?  (Total less fees.)

 

If you're showing the deposit total as you Credit Card Sales total in QBs, in a way you've already dealt with the expense.  It's just not directly shown in QBs.

 

If you want to show the expense there are a couple of different ways.  It would help to know how your accounts are set up for Credit Card and Cash Sales as well as Sales Tax.  But I'll the following out assuming your accounts are set up in a similar way.

 

Under Sales (Income Account) you could have two sub accounts:  Credit Card Sales & Cash Sales.  If you don't have it, you'll also need an Credit Card Fees (Expense Account).  I'll assume your accountant has set you up with a way to deal with your Sales Tax liability, but if not, I'll give you an example at the end.

 

At the end of the day you enter your deposit into QBs for the amount of the actual being Deposited (e.g. 95.00). For the associated Account(s) for the deposit you'd enter two lines.  First would be your Credit Card Sales account and you would enter in the Total Credit Card Sales for the day (e.g. 100.00).  The next line would be your Credit Card Fees which would be a negative number to deduct the fees (e.g. -5.00). 

 

Total of the deposit that your CC Processor makes to your bank should match what you just entered.  Total CC Sales - Fee = Deposit.

 

You can go back and edit the earlier deposits if you want, but before you do, be sure to check with your Accountant.  Although the ultimate total should be the same, you may throw off their numbers pending how they're showing Sales Totals.  They may want you to only do this quarter or maybe just do an Adjustment Entry as of 10/31 if  you haven't really been showing the full sales and the expense.  But from 11/01 forward you can see the Total Sales and the Fees as an expense in QBs.

 

As for Taxes, were accounts set up to pull the Sales Tax out of your POS Sales Totals?  If not, a restaurant I work with has it set up pretty simply and easy to total sales and what's being pulled out for sales tax (and tips in their case).

 

You would need an additional Income account called Sales Tax Collected and a Other Current Liability account called Sales Tax Payable.  You take the Sales Tax total from your POS and enter it into Sales Tax Payable account as something like Collected Sales Tax (pick Other when QBs asks you how to add it).  For the Account you pick your Sales Tax Collected account.

 

So you've now made an entry into Sales to reduce your Gross Sales to account for the collected Sales Tax (which is not income).  You also now have an entry showing your owed sales tax liability.  When it comes time to write the check for the sales tax, you simple choose the Sales Tax Payable account and you will see the decrease in the liability account.

 

Again, I'm not an accountant, so check with yours.  They may have a different preferred method they want you to use.

 

Hope this helps.

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