Hi This is probably an old question, but, I just started accepting credit card payments and would like to know the appropriate way to enter both the actual amount of the payment(which should be the same as the invoiced amount) and then the 'commission' the credit card processor takes off the top? I would appreciate it if someone could help. Thanks for yoru time Joe
I enter the fee amounts from the monthly statement as bank service charges:credit card discount.
Best,
Peter
Create an expense account called Payment Processing Fees or similar.
If the fee comes off the top of each transaction then you use Make Desposits to select the cc payment then enter a negative number on the next line using the PPF account.
If the merchant service provider charges a lump sum debit then you record it normally to the PPF account.
And if you are going to be doing a lot of cc transactions get the merchant service company to take their fees at the end of them month. This will result in the individual charges coming through as charged instead of net amounts. Net amounts will drive you crazy at bank rec time. It may cost you slightly more in fees but the time and frustrations saved during bank recs will make it worth it.
Thanks for the quick responses. I checked with the contract and the company and they told me that their fee will be deducted at the end of the month which corresponds to the ideas mentioned in the follow up posts.
In my first transaction, I had invoiced the total amount and then posted as 'Payment Received' for the same amount, which leaves out the commission the service charges---hence my question/post.
As I understand the posts, during the month, the payments received, the invoice totals and the resulting customer's statements will all show as being paid up. Then I need to wait until the EOM to post the monthly service charge as a transaction that will not directly relate to the individual transactions that were used to compile it during the month. I assume the accountant type person will be OK with this. I will present this to her for approval, but, as I understand it, the process seems to 'work'.
Prior to doing this, I processed Paypal payments by issuing an invoice, then receiving payment with the Paypal discount, then showing the Paypal discount which then 'balanced' the account within the same transaction period. I had assumed I would do the credit cards the same way...hence my post.
A lot of transactions would be a dream, but there apparently aren't that many improperly running computers out there or people looking to purchase ones that are running well....
All the help is appreciated. Thanks Joe
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