How to record credit card processing fee properly?

How do I account for a fee for accepting credit card from a customer to apply to their Invoice using QB 2008. Example: Inv for $99, $97 applied to bank account, how do I get the $2 into the expense?

Asked on December 10, 2018 in Account Management.
1 Answer(s)

Hello Angela!

Thank you for posting on our Community Forum.

It involves three steps process.

Let’s say for example, customer invoice is $100 and credit card fee is $3, and net bank deposit is $97.

  1. Customer Invoice = $100 (it creates a/r as debit and credit to income a/c)
  2. Receive Payment  = $100 (it relieves balance from a/r, moves it to undeposited funds)
  3. Bank Deposit = $97* (it relieves balance from undeposited funds to bank account)

Important split entry here:

Received From         From Account           …………..                              Amount

Line 1   Jane Smith                Undeposited Funds                                                 $100

Line 2   CC Fees*                  Merchant Service Fees (expense acct)                     -$3 (notice negative amt)

Deposit Subtotal as well as Deposit Total should show $97

* optional: setup “cc fees” as other type

 

Hope this helped.

Cheers!

Answered on January 2, 2019.

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