How do i apply a bank service fee to an invoice?

Great day to you, gary.werner,

I’m here to help share information on how to apply a bank service fee to an invoice.

To start with, you can enter bank service fee as a new Service item or enter bank service fee amount into the register so it matches the bank statement. Once done, enter the fee as a negative amount on the Bank Deposits screen upon depositing a payment.

Here’s how:

1. Click the Plus (+) icon at the top and then click Receive Payments.
2. Enter all the payment information and place a check next to the invoice you would like the payment to be applied to.
3. Choose Undeposited funds as the deposit to account and click Save.
4. Click the Plus (+) icon at the top and then click Bank Deposits.
5. You should see the payment you entered in the Select Existing Payments section at the top.
6. Place a checkmark to select the payment you want to deposit.
7. From the Add other funds to this deposit section, enter the amount of the bank service fee charged to you by the credit card company as a negative amount.
8. From the Account section, select the Expense account you usually use in tracking bank fees.
9. Verify that the deposit amount is correct and click Save.

That’s it! Please let me know how it goes, I’d be always here to help. Have a great day!

Hello!

Are these the same steps to take when the payment has been automatically deposited into the checking account, minus the bank fee?  Example: Invoice is $50, payment deposited is $45 (bank fee is $5 but there's not a separate transaction for that, they just reduced the payment they deposited to cover the fees).

Thank you.

Yes, those are the same steps for payments that are posted on your Checking account, naturecoastag.

After manually entering the deposit in QuickBooks, you can match it with payment on the Checking account. This way, it won't cause duplicate entries on your Chart of Accounts.

Let me show you how to match them:

1. Find a downloaded transaction with the Match option in the Action column on Banking page.
2. Note the Date, Description, Payee, and amount spent or received.
3. Select the downloaded transaction to expand the view.
4. Review the Matching records found in QuickBooks. This is the possible matching transaction you already entered in QuickBooks.
5. Select the link next to each match to get more details.
6. Make sure this is the correct match. In particular, review the Deposit to, Payment method, and Bank account fields on forms for the existing transaction in QuickBooks.
7. If this is the correct match, close the open transaction.
8. Select ​Match​.
    

The final step is to reconcile your bank accounts. This ensures your books are accurate and there aren't any duplicate transactions.

Don't hesitate to post again if there's anything else you need about recording payments in QuickBooks. I'm always glad to help you.

My bank is not connected in Quickbooks so I cannot match it with invoice, is there any other way?

Bank charges are also billed to the client on the next invoice, is it possible to bill it too?

Glad to see you in this thread, @AG6780. I’m here to help you track bank charges in QuickBooks.

Since your bank isn’t connected to QuickBooks Online, you can simply add the said charges as a service item and a negative amount to the invoice you created.

Here’s how:

1. Open or edit the invoice.
2. Select an item under Product/Services. You can create a new service item for bank charges if you don’t have one yet.
3. Enter the amount as negative.
4. Press Save or Save and close after.
   

And yes, you can bill it too. Make sure to follow the same process to get your books accurate.

You can use this guide if you want to add transactions directly to your account register: Manually add transactions to registers in QuickBooks Online. It helps you save time.

Moreover, the program offers ways to create a template for regular transactions and make customers' payments organized and connected from start to finish. For more details, see these resources:

• Create recurring transactions in QuickBooks Online
• Set up and send progress invoices in QuickBooks Online

I’ll be here to help if you need further assistance with managing your sales transactions. Just add them to your reply below. Keep safe always!

Thank you for your response but I'm not sure if this will work.  I only bill our clients once ( end of the month) and we're receiving the payments on the following month. If I'll edit the invoice, the previous month's Trial Balance will change too because the AR amount will decrease right?

I appreciate you for getting back, @AG6780. Let me provide additional information about tracking bank fees in QuickBooks Online (QBO).

The steps provided by my colleague above will help you record bank fees for customers' invoices in QuickBooks. You can also add it when recording a deposit. Here's how:

1. Sign in to QuickBooks.
2. Go to the +New icon, then click on Bank Deposit.
3. Scroll down to the Add funds to this deposit section.
4. Enter the fee as a line item.
5. Select who the fee was from (for example, the bank charging you).
6. Pick Bank Charges from the Account ▼ dropdown.
7. Enter the amount fee as a negative number. For example, if the fee was $.50, enter –.50.
8. Review the deposit total with the bank fee.
9. Tap on the Save and Close button.

You can learn more about this from this article: Record and make bank deposits in QuickBooks Online.

On the other hand, yes, modifying the invoice can affect your accounts receivable amount. If the invoice amount decreases, the AR will also decrease.

If you're uncertain about your records, you can always consult with an accountant to keep your reports and books in place.

When you're ready to record invoice payments, use this article as your reference: Record invoice payments in QuickBooks Online.

Let me know if you have any other questions about bank fees on invoices. I'll be right here to help. Have a good one!

using this process still shows a 'balance due' on the invoice.  Our customer paid the Invoice amount, but the amount deposited into our account automatically reduced it by the bank fee.  Say $50 was the invoice amount, but only $45 was deposited.  I followed the instructions and entered -$5 as a bank fee.  How do I close out the Balance due on the invoice?  

Hello there, @jimboc21.

First, let's make sure that the $50 payment is deposited to undeposited funds to clear the balance due on the invoice. Since you've already created a bank deposit for the fee, we need to open and link it to the received payment. 

Here's how to deposit the payment to the Undeposited Funds account:

1. Go to Sales and select Invoices.
2. Locate and click on the specific invoice.
3. Select Edit invoice.
4. Click Receive Payment.
5. On the Outstanding Transaction, put a checkmark on the box of the specific invoice.
6. Click on the dropdown arrow in the Deposit to option, then locate and select the Undeposited Funds.
7. Click Save and close.

These are the steps on how to add the payment to the deposit:

1. Go to the Accounting tab on the left menu.
2. Select view register.
3. Navigate and click the specific deposit (-$5).
4. Select who the payment was from ($50).
5. Review the deposit total with the bank fee.
6. Select Save and close.

For detailed information about the steps provided above, you can refer to this link: Record and make bank deposits in QuickBooks Online.

You may visit these links to guide you on how to categorize your transactions and reconcile your account flawlessly:

• Categorize and match online bank transactions in QuickBooks Online.
• Reconcile an account in QuickBooks Online.

The Community always welcomes you for further inquiries with regard to invoices and bank fees. Have a great day ahead!