I charged a customer for the credit card processing fee in addition to the service provided. The amount received for the processing fee now shows as income on the P & L. Since this is not income for services, how should I enter the transaction correctly so that it does not show on the income section?
Good day, bvindas.
The payment that you've received from your customer is part of your income. I'd like to know how you want to show it. If you'd like it to be part of your expenses, you'll want to consider changing the account affected.
Also, I'd suggest reaching out to your accountant or to any accounting experts. They can guide you on how to properly record it.
I'm just a post away to assist you. Hoping for a prosperous success!
While I understand that the charge is in fact income, I don't want it to show as income on the P & L since management uses this for sales projections. The charge does cancel out in the total as the expense of QB payments fees clears it. My next step is to reach out to the accountant to discuss. Thank you for your reply.
To change the account seen on your P&L, change the fees account wherever you recorded the fees you charged your customers.
How did you record the fees?
As far as I know there is no feature of the merchant service to up-charge your customers for the fees.
Those are the fees you were charged, I think, not the fees you tacked on to your sales to cover the CC fees.
How did you record the fees that are adding to your sales, that you don't want to see added to your sales?
The fee was passed on to the customer by adding it as a separate line item on the invoice. When the payment was received, the whole amount on the invoice was recorded as sales income.
That means the account associated with the fee item is what you're seeing in reports. like the P&L. If that is wrong, change the account on the item to a different account, and then when prompted answer yes to update existing data.