Hi! If you charge a processing fee you can either record a new invoice just for that when you receive the payment (that way the payment pays both invoices) or go back to the original invoice and add it in as a line item.
This is why I don't do the PayPal import. The iif file import format is messy at best. You have to take the bank account that effectively shows the income side and edit each transaction changing that paypal income account to an actual income (instead of bank) accounts. There are several services now out there that claim to do a better import but I haven't had a chance to test any of them yet so in the meantime I manually enter sales receipts for all of my PayPal activity.
Dear Professor, questions, a customer paid me an invoice with credit card, we charge 3% as processing fee to the customer, but I don't know if I need add this fee amount to the invoice or where? because when I record a customer payment I already have this window associate with the bank account, so I don't need go to make deposit window to record this. where I must record this fee, and how I set up the bank fee account associate with CC. thanks in advance for your great videos. Good bless you.
Sounds like it cut out for you for some reason. Does it end at 8:12 for you? It should end with me saying my usual, "I look forward to seeing YOU on the web."
I do quickbooks online and all my customers pay their invoices with credit cards through the intuit processing I have linked to their invoice. How do I reconcile the processing fees with my bank account
Very useful information. I wanted to ask about the same item. When we want to pass this fee on to the customer, how do we charge them? On the invoice do we create a "service" or "other charge" and if we do then what account do we point it to?
This helped me for my payments i'm getting from venmo.. I have a question though.. I wasn't doing this previously.. so can i write a check for merchant fee's after the fact? example.. I have an invoice I already closed out, been paid for.. but now I'm wondering if i can account for the venmo fee's..
Hi ! can this be used for a invoices with a factoring company? We are a general freight trucking company and use a factoring company to front money. They charge 3% of each invoice. Would this be a correct use of what you just explained?
What would I do if I made an owner withdrawal and had a bank ATM transaction fee? Would I apply the $ amount or leave it as a payment to the bank for withdrawing money? I put it as Bank service charge. Would that be correct?
No you're good and you should set up PayPal as a bank account. But before recording a deposit have the payment you received go into undep funds so you can record the deposit into Paypal while taking out the fees. Then when you transfer the money to your bank account that is simply a transfer from one bank account in QB to another.
what if the client is paying for a service for which an invoice is not created? For example a hair salon service. Can the process be done from the Sales Receipt page and attribute the fee to back fee on the split lines below?
Bank service charge is correct. I book a check out of the bank account for the total ATM withdrawl (let's say it's $103 with a $3 ATM fee). Then in the bottom portion of the check you split it, $100 to Owner Draw and $3 to Bank Service Charge.
I can't get past the fact that your bank account never sees $103. It only sees $100. Isn't selling on Etsy for example like selling wholesale? For wholesale, you record the wholesale amount you get as your gross. My account never takes in the overall amount listed as the retail price in etsy.
@@lexicamaccrady4767 The gross sale would be $103. That's what your customer paid you for the product. Then the bank takes $3 - that's an expense that the bank happens to be taking from you before they give you the remaining $100. You can record it net, but that's not what I would call, "Bulletproof Bookkeeping" because you're leaving out an important piece of the picture.
When the bank pays interest I just go bank make deposits. I have the bank name as other name, for account it is interest income then make deposit. Is the bank set up as other name ok?? or Vendor better?? Same thing when the bank deposits for reimbursed expense. So you need a name Chase bank for example then which account under etc. So is that correct for bank?? Hopefully that is clear. Thanks
Hello I have one question Professor? One Customer paid me one invoice, with Credit Card. We charge 2.70% as processing fee to that Customer, but I don't know If I need ad this fee at invoice or Where?
Question: I sell at art shows in various states. I accept payments from customers at my booth with Square then receive PPD deposits from Square with fees removed and sales tax added. I don't invoice. I simply want to enter the deposit, sales tax payable and Square fee somehow. Any suggestions?
Hey Seth, Great Quickbooks tips. If this works with credit card processing, would this also work for small businesses that own ATM Machines so they can record ATM processing fees?
When you own the ATM's there's kind of a whole different set up needed. Each ATM should really be set up as a bank account (or an other current asset). Then you can easily record the money you put IN to the ATM's and then the Money withdrawn becomes a receivable from the financial institutions until they fund your bank account, and then, yes when they deduct any fees you can record that in the same manner as this video shows you. Hope that helps :)
Hi, what if I want to enter the charge on the customer's invoice? They will pay the credit card fee. Then if I enter the fee on my bank register my books won't balance.
If you charge the fee and include it on their invoice then they will have paid the full amount including the fee. That should match what shows up in the bank feed. The fees you pay should come up separately so that will match it's own transaction in your bank feeds. Keep in mind that in many states this is illegal. You often cannot charge "extra" for paying by credit card. What you CAN do is charge less for paying with cash. See here for California's law on this: oag.ca.gov/consumers/general/credit-card-surcharges
Sir, It's possible to prepare and print an Official Receipts after process Customer Payments.. Most of my clients how to prepares and print the Official Receipts. Thanks
Hi! Can I record a Journal entry of Merchant Fee Income (Charge to Customer) Is it a right way to do this? If I don't want to add a line item in my Invoice. Actually I have to record a fee separately due to my software limitation. If I've a Invoice ($100) and I push payment $100 and want to push a fee $4.00 separately instead of one payment 104 (payment + Fee)?
I'm assuming from this comment that you are not using QuickBooks Desktop or Online? If you are, then you would definitely want to include a line item to capture the fee. The problem with doing a separate journal entry is that you will receive $104 but your invoice will only be for $100. So when you debit the Fee Income for $4, your credit would still need to go to A/R for that customer so you can match up the other $4 with that entry.
@@nerdenterprises Actually I'm using QBO and I have to sync Payment from my software to QBO. I've 2-way-sync software working on and I have to sync payment without fee ($100) to not affecting the customer balance. as I charge a fee to a customer so after search and I can see to add a Sales Receipt of processing fee income. If I go line item thing I've to change many things. There were at one stage my client suggests me after CPA we can label this fee as an "Processing fee charge to client". I am hoping from your side to attention again. Thank you for your reply Sir
@@AbdulRehman-s8i2r So create the sales receipt for the $4 fee and deposit to Undeposited Funds. Then receive $100 payment on the invoice for the $100 and deposit to Undeposited funds. Then make the deposit to the bank by selecting both payments so it totals $104.
Very Helpful! Can you do this with commission fees? and taxes? It's like consignment I guess....for example one company sells my item for $100, charges 9% tax, and takes out 25% commission and thus deposits $84 into my bank account. (looking to use quickbooks online) ... would I just create a commission fee expense account, identify the customer/vendor and set the rate, then add a separate line of sales tax expense or ???
Any time something is deducted from proceeds that you receive from the sale of goods or services, before you receive the payment, this method can be employed. The bottom line is that you want to give your customer credit for having paid in full, even though you didn't receive that full amount, so you enter the full payment, then deduct whatever was taken out in the deposit, as a negative item. When you make a deposit, you are debiting the bank account for whatever that total is. This means that anything you are including on the line items of that deposit, and the accounts that you list, are being credited. When you put a negative line item within a deposit, it has the opposite effect. A negative credit is a debit. So that negative line item is debiting whatever account you use on that line item, such as "credit card processing fees." If your consignee charges sales tax, they should collect and pay that from their own customer - not take if from you. The commission, makes sense. As a negative line item for that 25%, you would in effect debit commission expense, thereby increasing your expenses, and reducing the amount you received from your customer (the consignee).
Jack Klassen Same idea. Screens look different. You still post the gross to Undep funds. When you go to deposit in QuickBooks Online, there is no pop-out for Undepostied funds like there is in desktop. You'll see a list of payments with check boxes. Check off your payment and then in the bottom portion record the fees as a negative.
i almost peed myself bbbbaaaaannnkkkiiiinngggg / mmmmmaaaaaakkkkeeee dddddddeeeeeppppppooooooossssssiiiittttttttttssssss Thank you Seth for your tutorials. It helped a lot with some of the questions i had.
Ahh you mean at #4:40 when I wanted to make sure I went slow enough for everyone? Yes I get slammed at times with comments from people saying I go too fast. I can't help it! I'm excited about teaching people this stuff!
Hi, I follow your steps on this video creating and invoice, then receiving a payment for that invoice. I selected the undeposited funds account. The problem is that when I go to Bank Deposit nothing comes up to be deposit, so I can't deduct the merchant processing fees. Thank you!
Check your chart of accounts, to be sure there isn't a "duplicate" undeposited funds account (and check inactive accounts as well). It has to be the "system" undeposited funds account.
Thank, wich is the best number to reach you, I will like to discuss with you how much will it cost me a 1-1 help with this issue, I also need help recording son Amazon transaction.
You may want to check on this, but I think it is illegal to charge a markup on a credit card fee. Assuming it isn't, then the difference goes to an income account.
I have spent hours searching for this solution for my brand new hvac contracting. I finally understand how. Thank you
Hi! If you charge a processing fee you can either record a new invoice just for that when you receive the payment (that way the payment pays both invoices) or go back to the original invoice and add it in as a line item.
This is genius!
Still helpful after so many years.
This is why I don't do the PayPal import. The iif file import format is messy at best. You have to take the bank account that effectively shows the income side and edit each transaction changing that paypal income account to an actual income (instead of bank) accounts.
There are several services now out there that claim to do a better import but I haven't had a chance to test any of them yet so in the meantime I manually enter sales receipts for all of my PayPal activity.
I looked for this forever, thank you!
Dear Professor, questions, a customer paid me an invoice with credit card, we charge 3% as processing fee to the customer, but I don't know if I need add this fee amount to the invoice or where? because when I record a customer payment I already have this window associate with the bank account, so I don't need go to make deposit window to record this. where I must record this fee, and how I set up the bank fee account associate with CC. thanks in advance for your great videos. Good bless you.
Sounds like it cut out for you for some reason. Does it end at 8:12 for you? It should end with me saying my usual, "I look forward to seeing YOU on the web."
I do quickbooks online and all my customers pay their invoices with credit cards through the intuit processing I have linked to their invoice. How do I reconcile the processing fees with my bank account
Great video. Very clear explanation. I agree with your method of thinking of the big picture and having the entries represent what actually happened.
OK so it's working now or is it still not flowing through?
Very useful information. I wanted to ask about the same item. When we want to pass this fee on to the customer, how do we charge them? On the invoice do we create a "service" or "other charge" and if we do then what account do we point it to?
This helped me for my payments i'm getting from venmo.. I have a question though.. I wasn't doing this previously.. so can i write a check for merchant fee's after the fact? example.. I have an invoice I already closed out, been paid for.. but now I'm wondering if i can account for the venmo fee's..
Hi ! can this be used for a invoices with a factoring company? We are a general freight trucking company and use a factoring company to front money. They charge 3% of each invoice. Would this be a correct use of what you just explained?
What would I do if I made an owner withdrawal and had a bank ATM transaction fee? Would I apply the $ amount or leave it as a payment to the bank for withdrawing money? I put it as Bank service charge. Would that be correct?
No you're good and you should set up PayPal as a bank account. But before recording a deposit have the payment you received go into undep funds so you can record the deposit into Paypal while taking out the fees. Then when you transfer the money to your bank account that is simply a transfer from one bank account in QB to another.
what if the client is paying for a service for which an invoice is not created? For example a hair salon service. Can the process be done from the Sales Receipt page and attribute the fee to back fee on the split lines below?
Bank service charge is correct. I book a check out of the bank account for the total ATM withdrawl (let's say it's $103 with a $3 ATM fee). Then in the bottom portion of the check you split it, $100 to Owner Draw and $3 to Bank Service Charge.
I can't get past the fact that your bank account never sees $103. It only sees $100. Isn't selling on Etsy for example like selling wholesale? For wholesale, you record the wholesale amount you get as your gross. My account never takes in the overall amount listed as the retail price in etsy.
@@lexicamaccrady4767 The gross sale would be $103. That's what your customer paid you for the product. Then the bank takes $3 - that's an expense that the bank happens to be taking from you before they give you the remaining $100.
You can record it net, but that's not what I would call, "Bulletproof Bookkeeping" because you're leaving out an important piece of the picture.
Great video. Very clear. Precisely answered my pressing question. Well done.
Thank you Scott!
When the bank pays interest I just go bank make deposits. I have the bank name as other name, for account it is interest income then make deposit. Is the bank set up as other name ok?? or Vendor better?? Same thing when the bank deposits for reimbursed expense. So you need a name Chase bank for example then which account under etc. So is that correct for bank?? Hopefully that is clear. Thanks
Hello
I have one question Professor?
One Customer paid me one invoice, with Credit Card. We charge 2.70% as processing fee to that Customer, but I don't know If I need ad this fee at invoice or Where?
Question: I sell at art shows in various states. I accept payments from customers at my booth with Square then receive PPD deposits from Square with fees removed and sales tax added. I don't invoice. I simply want to enter the deposit, sales tax payable and Square fee somehow. Any suggestions?
How can you record your payments manually in quickbooks desktop plus 2020?
Hey Seth, Great Quickbooks tips. If this works with credit card processing, would this also work for small businesses that own ATM Machines so they can record ATM processing fees?
When you own the ATM's there's kind of a whole different set up needed. Each ATM should really be set up as a bank account (or an other current asset). Then you can easily record the money you put IN to the ATM's and then the Money withdrawn becomes a receivable from the financial institutions until they fund your bank account, and then, yes when they deduct any fees you can record that in the same manner as this video shows you.
Hope that helps :)
It would be good to see this same issue resolved on QB Online.
Can you do a vid discussing how a bill paid via wire transfer would be accounted for?
Hi, what if I want to enter the charge on the customer's invoice? They will pay the credit card fee. Then if I enter the fee on my bank register my books won't balance.
If you charge the fee and include it on their invoice then they will have paid the full amount including the fee. That should match what shows up in the bank feed.
The fees you pay should come up separately so that will match it's own transaction in your bank feeds.
Keep in mind that in many states this is illegal. You often cannot charge "extra" for paying by credit card. What you CAN do is charge less for paying with cash.
See here for California's law on this:
oag.ca.gov/consumers/general/credit-card-surcharges
Thanks for this AWESOME tutorial. Very helpful.
Sir, It's possible to prepare and print an Official Receipts after process Customer Payments.. Most of my clients how to prepares and print the Official Receipts. Thanks
Sounds good!
Hi! Can I record a Journal entry of Merchant Fee Income (Charge to Customer) Is it a right way to do this?
If I don't want to add a line item in my Invoice.
Actually I have to record a fee separately due to my software limitation. If I've a Invoice ($100) and I push payment $100 and want to push a fee $4.00 separately instead of one payment 104 (payment + Fee)?
I'm assuming from this comment that you are not using QuickBooks Desktop or Online? If you are, then you would definitely want to include a line item to capture the fee.
The problem with doing a separate journal entry is that you will receive $104 but your invoice will only be for $100. So when you debit the Fee Income for $4, your credit would still need to go to A/R for that customer so you can match up the other $4 with that entry.
@@nerdenterprises
Actually I'm using QBO and I have to sync Payment from my software to QBO. I've 2-way-sync software working on and I have to sync payment without fee ($100) to not affecting the customer balance.
as I charge a fee to a customer so after search and I can see to add a Sales Receipt of processing fee income.
If I go line item thing I've to change many things. There were at one stage my client suggests me after CPA we can label this fee as an "Processing fee charge to client".
I am hoping from your side to attention again. Thank you for your reply Sir
@@AbdulRehman-s8i2r So create the sales receipt for the $4 fee and deposit to Undeposited Funds. Then receive $100 payment on the invoice for the $100 and deposit to Undeposited funds.
Then make the deposit to the bank by selecting both payments so it totals $104.
Very Helpful! Can you do this with commission fees? and taxes? It's like consignment I guess....for example one company sells my item for $100, charges 9% tax, and takes out 25% commission and thus deposits $84 into my bank account. (looking to use quickbooks online) ... would I just create a commission fee expense account, identify the customer/vendor and set the rate, then add a separate line of sales tax expense or ???
Any time something is deducted from proceeds that you receive from the sale of goods or services, before you receive the payment, this method can be employed. The bottom line is that you want to give your customer credit for having paid in full, even though you didn't receive that full amount, so you enter the full payment, then deduct whatever was taken out in the deposit, as a negative item.
When you make a deposit, you are debiting the bank account for whatever that total is. This means that anything you are including on the line items of that deposit, and the accounts that you list, are being credited. When you put a negative line item within a deposit, it has the opposite effect. A negative credit is a debit. So that negative line item is debiting whatever account you use on that line item, such as "credit card processing fees."
If your consignee charges sales tax, they should collect and pay that from their own customer - not take if from you. The commission, makes sense. As a negative line item for that 25%, you would in effect debit commission expense, thereby increasing your expenses, and reducing the amount you received from your customer (the consignee).
Awesome, thank you for your help! I'm slowly but surely hacking through this accounting jungle....finally:)
day dreamer awesome. remember we can offer 1:1 help at www.schoolofamswers.com 😁
This worked great for my 2014 version, but What about with the Online version? I'm lost
Jack Klassen Same idea. Screens look different. You still post the gross to Undep funds. When you go to deposit in QuickBooks Online, there is no pop-out for Undepostied funds like there is in desktop. You'll see a list of payments with check boxes. Check off your payment and then in the bottom portion record the fees as a negative.
i almost peed myself bbbbaaaaannnkkkiiiinngggg / mmmmmaaaaaakkkkeeee dddddddeeeeeppppppooooooossssssiiiittttttttttssssss
Thank you Seth for your tutorials. It helped a lot with some of the questions i had.
Ahh you mean at #4:40 when I wanted to make sure I went slow enough for everyone? Yes I get slammed at times with comments from people saying I go too fast. I can't help it! I'm excited about teaching people this stuff!
Hi,
I follow your steps on this video creating and invoice, then receiving a payment for that invoice. I selected the undeposited funds account. The problem is that when I go to Bank Deposit nothing comes up to be deposit, so I can't deduct the merchant processing fees.
Thank you!
Check your chart of accounts, to be sure there isn't a "duplicate" undeposited funds account (and check inactive accounts as well). It has to be the "system" undeposited funds account.
Thank, wich is the best number to reach you, I will like to discuss with you how much will it cost me a 1-1 help with this issue, I also need help recording son Amazon transaction.
Hi! Sorry for the delay. You can sign up for session at www.SchoolofAnswers.com plans and rates are all outlined there.
What if you charge more than the regular percentage rate to the customer? Say the fee is 2.75 but you charge 4%. How would you categorize that?
You may want to check on this, but I think it is illegal to charge a markup on a credit card fee. Assuming it isn't, then the difference goes to an income account.
excelent tutorial.
Thank you!
Perfect explanation. Thanks.
Thank you!!!
You're welcome!
How would I do this for multiple paypal transaction fees?
Multiple fees on a single transaction?
Thank you that answered my question to a T!!
You're welcome!
Good work... Thanks
Your so helpfull!! Thank you so much :)
Thank you!
Fucking Brilliant!!! thank you. You have saved my ass more times than i can count
Amazing! So glad this (and others) helped you!
Thank you! Perfect explanation.