How do I write off a short payment due to transfer charges?

Hi 123146051009589!

Thanks for reaching out to us. Let me share the steps on how to record the charges in QuickBooks Online.

First, you'll need to close the invoice regardless of the funds you actually received are short due to the charges. You can follow these steps:

1. Go to the + New and select Receive payment.
2. Select the Customer, the invoice, and enter the details needed.
3. From the Deposit to drop-down, make sure to select the Undeposited Funds account.
4. Tap Save and close.

Once done, you'll need to make a bank deposit. You can follow the steps here: Record and make bank deposits in QuickBooks Online. From the Add funds to this deposit section, you can add the charges from PayFast. This will deduct the total amount you're depositing.

If the charges are too high that will result in a negative amount and won't allow you to make a deposit any longer, you can create an expense transaction instead.

1. Go to the + New button and select Expense.
2. Enter the details needed such as the amount and the expense account you want to use in tracking the charges. 
3. Tap Save and close.

I added some links you can check. These will help you to easily balance your accounts in QuickBooks Online:

• Connect bank and credit card accounts to QuickBooks Online
• Reconcile an account in QuickBooks Online

Keep on posting here if you need more assistance in recording transactions. Take care!

Thank you for the reply.

I should probably have mentioned that we have our QB Online set up to automatically fetch the bank transactions.  I then use the Banking screen to allocate each payment to the appropriate invoice. We therefore do not use "Receive payment": In fact, my partner was using that instead of the Banking screen, and it has totally messed up our bank balance in QBO, a problem that is going to take years to unravel.  [This is a major pitfall in QBO; I would even call it a massive bug, and a big reason to avoid using the program.]

Anyway, since we aren't making deposits in QBO, but rather, categorising downloaded transactions directly in the bank account, we can't use your advice.  Any other way to do it, please?

Thanks and RICKgards

Good to see you back and provide additional details about your concern, @123146051009589.

To handle this situation, you'll need first to receive the invoices payment amount using the Receive payment feature. Then, deduct the transfer charges as a negative amount through the Add funds to this deposit section when you deposit the invoice payment. By doing this, you're able to match the bank deposit to the downloaded transaction.

To get started, create an expense account to allocate the transfer charges. Here's how:

1. On your QuickBooks Online (QBO) account, click Accounting in the left menu.
2. Go to the Chart of Accounts tab.
3. Click the New button on the right-hand side.
4. Create an Expense account and name it Transfer Charges.
5. Click Save.

After that, add the fees to your deposit.

1. Receive the payment to the undeposited funds.
2. Record a deposit.
   1. Select the pending payment to be deposited.
   2. Go to the Add funds to this deposit section, then select the account created.
   3. Enter the fees in a negative amount.
   4. Save the transaction.

Once done, match the bank deposit to the transfer charges from the Banking menu. For guidance in managing your transactions, click this link: Categorise and match online bank transactions in QuickBooks Online.

If you have other questions while managing your transactions, please let me know in the comment section. I'll gladly help. Take care, and I wish you continued success, @123146051009589.

This is way too complicated.

Worse, it does not address at all the point that the bank transactions are being automatically downloaded.  Using Receive the payment, as you suggest, creates a duplicate entry which, as I pointed out above, is a SERIOUS FLAW in QBO and has completely screwed up our accounts. I'm not going near it until Intuit fixes this problem.

Kindly give me a method that works with the Banking screen and does not create other problems.

Thank you.

Hi there, @123146051009589. I've got the steps you're looking for that works with the banking screen.

If you receive a payment less than the invoice amount due to bank fees, you can use the Resolve Difference feature to account for the bank charge.

Let's start by creating a Bank Charges account using the following instructions:

1. Go to Accounting from the left menu.
2. Choose Chart of Accounts.
3. Click New.
4. In the Account dialog, create an Expense account for Bank Charges, and give it a name, e.g Bank Charges or Bank Fees.
5. Select Save and close.

Once done, you can match the invoice with the bank transaction. Then, use the Resolve Difference feature to record the bank fee. 

Here's how:

1. Go to Banking on the left menu and select Banking.
2. Select the bank account.
3. Locate the transaction in the For Review tab.
4. Select the Find Match button.
5. In the Match transactions window, select the invoice to match.
6. Enter the exact payment in the Payment field.
7. Tick Resolve Difference to open the Add resolving transactions fields.
8. Click Add new transaction.
9. From the drop-down list in the Category field, select the Bank Fees expense account you created.
10. Enter a negative amount for the bank fee.
11. Click Save and close.

Your transaction is now matched off against the invoice and the bank fees are accounted for.

Here's an example:

Additionally, you can use create bank rules in QuickBooks Online. They are a marvel and can save data entry time. Bank rules can automatically categorise and add transactions to an account register.

For more in-depth information about finding a match, refer to these articles:

• Tips for Working in QuickBooks Online’s Bank Feed: Matching Transactions
• Categorise and match online bank transactions in QuickBooks Online

Feel free to leave a comment below if you need more help with managing bank feeds. I'll get back to you as soon as I can.