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What are more efficient ways of recording online sales in Quickbooks?

So I'm running a small e-commerce site, using Shopify, so obviously all of my sales will be online sales.  All orders are either paid by credit card or with PayPal.  I'm wondering what methods you guys, out there in the QB world, use to record orders.

I currently have my main checking account set up, in QB, and then two other "bank" accounts for credit card purchases and PayPal purchases.  When I record a sale I will use the "Deposit to" method, and deposit the funds into the appropriate accounts.  I then will record another transaction when those funds hit my actual bank account.

I also am charged credit card fees or PayPal fees for each transaction.  I'm currently recording these as an expense and include them straight on my sales receipt.  So I will have the cost of the item plus any shipping an tax, and then I'll have another line that says "PayPal Fees."  This amount will always be negative so that the correct net amount is deposited.

It would be great to not have these fees on the actual receipt, and have them subtracted elsewhere.  After researching a bit online I found out that some people classify the fees as a COGS rather than expense.

Are there any suggestions out there?

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Best answer 12-10-2018

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Frequent Explorer **

Your credit card statement should show the batch of card...

Your credit card statement should show the batch of card receipts for the day.  How you post depends on the granularity you want to keep in QuickBooks (QB).  If you want to track each customer, then you should post each sale through the Sales Receipt.  At the end of the day, you would "Make Deposit" selecting the individual sales that made up the CC daily entry.  If you don't care about tracking individual customers (since you probably don't have many repeat sales, simply "Make Deposit" and enter each sale on a separate line of the deposit.  You can put in the customer's name, but QB will not tie it back for customer history.  Deposit to the "bank" Credit Card.  When that money rolls into your checking account, you can do a Banking > Transfer funds to move the money from Credit Card to checking account.  You can do the same with PayPal, treating it as a "bank". 

As far as the CC/PayPal fees, if you know them for each transaction, you can record them as a negative on the Sales Receipt.  Mostly, though, they are a separate item for each day.  In that case, simply "Write Check" to the appropriate agency for that day's fees.  The fees would be a COGS as they are the cost of selling the goods.

7 Comments
Highlighted
Frequent Explorer **

Your credit card statement should show the batch of card...

Your credit card statement should show the batch of card receipts for the day.  How you post depends on the granularity you want to keep in QuickBooks (QB).  If you want to track each customer, then you should post each sale through the Sales Receipt.  At the end of the day, you would "Make Deposit" selecting the individual sales that made up the CC daily entry.  If you don't care about tracking individual customers (since you probably don't have many repeat sales, simply "Make Deposit" and enter each sale on a separate line of the deposit.  You can put in the customer's name, but QB will not tie it back for customer history.  Deposit to the "bank" Credit Card.  When that money rolls into your checking account, you can do a Banking > Transfer funds to move the money from Credit Card to checking account.  You can do the same with PayPal, treating it as a "bank". 

As far as the CC/PayPal fees, if you know them for each transaction, you can record them as a negative on the Sales Receipt.  Mostly, though, they are a separate item for each day.  In that case, simply "Write Check" to the appropriate agency for that day's fees.  The fees would be a COGS as they are the cost of selling the goods.

Not applicable

Thanks for the comment. For each sale I am currently usi...

Thanks for the comment.

For each sale I am currently using a sales receipt, since we are collecting the payment immediately.  For each receipt I make sure that the appropriate "bank" account is selected to put the funds into.  This would be either the CC bank account or PayPal one.  Once those funds are deposited into my actual checking account I transfer the funds in QB.  What I'm wondering is, is there any difference from using "Make Deposit" and "Transfer Funds?"  I'm currently just using "Make Deposit."  When I do so I just put down the whole net deposit, as I don't care about recording each individual deposits.  So lets say I had two CC orders for $25 and $20 for that day, I will just put one deposit going from my CC bank account to my actual checking account. for $45.

As for recording the fees, I am currently recording them as a negative amount on the Sales Receipt.  I am trying to move away from this, as I'd rather not have it appear on the Sales Receipt, just in case I need to resend it to the customer for some reason, I don't want them to see any fee line item.  I suppose I could try writing a check for the net fee amount each day, but is there any way that I could enter when I make funds transfers to my checking account?  So when I use the "Make Deposit" or "Transfer Funds" function, is there a way I can record the fees there, that would make accounting sense?
Frequent Explorer **

I understand better what you are doing now.  You are usin...

I understand better what you are doing now.  You are using a direct deposit from the Sales Receipt window into a "bank" account.  You ask if there is a difference between Make Deposit and Transfer Funds.  Yes, in your case.  When you record the sale directly into the bank, the money is in your QuickBooks system.  If you Make Deposit again, you will be adding the money into your system again.  Once it is in your system, you want to Transfer or move it from one bank to another.  
"So lets say I had two CC orders for $25 and $20 for that day, I will just put one deposit going from my CC bank account to my actual checking account. for $45." How do you differentiate between who the $25 customer is and who the $20 customer is?  If you are not differentiating, then you can simply add the negative fee to the sales receipt.  If you are tracking each customer (which you indicate you are with "in case I need to resend it to the customer").  In this case you should record each customer's purchase with a Sales Receipt for the gross amount.  You will need to go into the Edit > Preferences > Company > Payments and select the "Use Undeposited Funds as the default deposit to account".  This way you will enter the $25 for customer A, the $20 for customer B.  At the end of the day, you would go into Make Deposit and both amounts will be there.  Select the CC "Bank" and add the service charge as a negative here.  That keeps the service charge off the Sales Receipt in case you need to resend it.  That way you can reconcile your CC account (as well as your PP account).  When the money moves from the CC to the checking account, you would use a transfer to do so since the money is already in your QB system.
Not applicable

Thanks again for the help. After messing around with a f...

Thanks again for the help.

After messing around with a few things, I think the method you mentioned will better get the results that I am wanting.  Although it requires an extra step from what I was doing, I like that the fees don't show up on the Sales Receipts.  I'm not doing a huge amount of sales at this point, so all of these steps are okay.  If my business begins to grow (hopefully) we will see how this method still fairs.  But for now I am satisfied.
Not applicable

MDTerp66, I like the solution you posted above, when I in...

MDTerp66, I like the solution you posted above, when I invoice customers to deposit it into Undeposited Funds, from there transfer to paypal bank and record the fees, from there at the end of the month I can deposit all the money held in paypal to the chequing account.

This solution was posted 4 years ago, I'm wondering if with all the new updates to quickbooks online if there are any changes to how this process can be done more efficiently.

The only difference between myself and the original situation that was asked about is;
They are an online ecommerce store meanwhile I'm an agency the invoices clients and sometimes they choose to pay via PayPal because they have funds in reserves there.

All the best,
Daniel
Not applicable

Re: I understand better what you are doing now. You are usin...

I have a similar situation (online sales and merchant fees being deducted from the deposit) and have an additional question.  When I go to receive payment the sales receipt does not show up.  I verified the sales receipt has undeposited funds as the deposit to.  I assume it is not showing up under receive payments because a sales receipt is assumed an automatic payment, therefore it is already showing up as paid.  So how I do I work around this?  I don't want to have to delete a sales receipt and create an invoice ever time a sale occurs.  This is a ridiculous inefficiency in this day and age.

QuickBooks Team

Re: I understand better what you are doing now. You are usin...

Thanks for joining this thread, hasselbock.

 

Allow me to jump in and help provide some insights about recording online sales in Quickbooks.

 

You'll need to record banking deposit and select the sales receipt transaction then enter the transaction fee as an expense with the negative amount. This will match your online bank and QuickBooks deposit.  

 

To do this, here's how:

  1. Select the Plus icon (+) on the Toolbar.
  2. Under Other, select Bank Deposit.
  3. In the Choose an account field, select the bank account to which to deposit funds.
  4. If available, select the checkboxes of the transactions to deposit in the Select the payments included in this deposit or QuickBooks Payments sections.
  5. In the Add funds to this deposit table, select an expense account for the transaction fee and enter the amount as negative.
  6. Click Save and Close.

For additional reference, you can check this article: How to record bank deposits.

 

If you need further assistance with the steps, I encourage you to contact our QuickBooks Online Support Team. They have additional tools to pull up your account and do a screen-share.

 

Here's how you can contact our support:

  1. Sign in to your QuickBooks Online company.
  2. Select Help (question mark icon) at the top right.
  3. Click Contact us to connect with a live support agent.

This will get you on the right track. Feel me in if you have additional questions about recording bank deposit in QuickBooks. Wishing you and your business continued success. 

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