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vickey
Level 1

My client charged a customer more than their invoice amount to process payment via credit card. How can I post the overage in payment to Bank Card Fees?

 
9 Comments 9
lynda
Community Champion

My client charged a customer more than their invoice amount to process payment via credit card. How can I post the overage in payment to Bank Card Fees?

Hi @vickey:

 

My first question to you:

 

Does your state allow for you to collect the fees on a credit card transaction?  I live in Florida.  It is illegal to charge that fee.  So I would start there.  Check with your state agency. 

 

If it is, you have 2 options:

 

1.  Modify the invoice an add a line item for the bank/credit card fee.

2.  Create a 2nd invoice to apply the overage to.  Again, add a line item for the bank fees.

 

Lynda

qbteachmt
Level 15

My client charged a customer more than their invoice amount to process payment via credit card. How can I post the overage in payment to Bank Card Fees?

You would not modify the existing invoice; that is changing a historic and existing Sale. That affects all financial reporting, sales tax reporting, etc. The new charge is a new charge as income, on a new Invoice, because it is a New Sale.

vickey
Level 1

My client charged a customer more than their invoice amount to process payment via credit card. How can I post the overage in payment to Bank Card Fees?

Will it create a mess if I modify the invoice after the client has already paid by credit card & the invoice reflects that?
Thanks, Vickey
vickey
Level 1

My client charged a customer more than their invoice amount to process payment via credit card. How can I post the overage in payment to Bank Card Fees?

Will it create a mess if I modify the invoice after the client has already paid via credit card & the invoice reflects that?
Thanks, Vickey
vickey
Level 1

My client charged a customer more than their invoice amount to process payment via credit card. How can I post the overage in payment to Bank Card Fees?

Oh and there was no sales tax as the sale was out of state not requiring my client to process sales tax.

Thanks, Vickey

IamjuViel
QuickBooks Team

My client charged a customer more than their invoice amount to process payment via credit card. How can I post the overage in payment to Bank Card Fees?

It’s good to have you here again, @vickey.

 

I’m here to help you ensure you’re able to record and properly apply the overage fees you’ve received from your customers in your QuickBooks account.

 

May I ask how much credit card processing fees your client charged to each invoice? Once you have it, all you need to do is to create a service item with an expense account.

 

Here’s how to create the service item:

  1. Go to the Gear Icon.
  2. Choose Products and Services.
  3. Click the New button.
  4. Select Service.
  5. Enter the name of the of the service item.
  6. Put a check mark on “I sell this product/service to my customers.”
  7. Change the income to an expense amount (i.e. Other Expense).
  8. Click Save and Close.

Slide1.GIF

Once you have created the service item,  you can add it to the invoices you’ll create to show the credit card processing fees. Please refer to the screenshot below:Slide2.GIF

That’s it! Please don’t hesitate to hit the Reply button if you have other questions about managing your overage transactions. I’m always here to help.

lynda
Community Champion

My client charged a customer more than their invoice amount to process payment via credit card. How can I post the overage in payment to Bank Card Fees?

Hi @vickey

 

If they paid more to add in the cc fees, and it is in a current month (like it happened yesterday), you can just modify the invoice to account for the fees.  Is it the exact perfect way to do it? No.  Does it happen all the time? Yup.  

 

Now, if you are working in a invoice from a prior month or a closed period  (or sales tax, which you said does not apply), you do want to be sure to just create the separate invoice and clear the extra balance from there.   

 

If you want to avoid any mess, just make the second invoice for the fees and open the payment and apply that to it.  Be sure to date the 2nd invoice to the date of the original or you will end up with unapplied cash payment income transaction, which is a QBO only thing . But will also need to be fixed if the invoice for the fees is dated after the payment.

 

Lynda

lynda
Community Champion

My client charged a customer more than their invoice amount to process payment via credit card. How can I post the overage in payment to Bank Card Fees?

Hi @IamjuViel:

 

The customer is paying more to include the credit card fees, not less.  So the method of using a credit memo will reduce the invoice not increase it. And I am pretty confident you cannot enter a negative amount in a credit memo.  Unless I am missing something on the question that you are seeing and I am not.

 

So, while your answer is great for someone reducing their invoice total with a credit memo (less) than the invoice amount, it won't work for @vickey whose customer is actually adding to the payment to cover the credit card fees.

 

Lynda

IamjuViel
QuickBooks Team

My client charged a customer more than their invoice amount to process payment via credit card. How can I post the overage in payment to Bank Card Fees?

Thank you for looking into the post, @lynda.

 

I have updated my answer above to match customer's concern.

 

Let me know if you have any questions. I'm always here to help.

 

 

 

 

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