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How to record merchant account fees in quickbooks

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  #1  
Old 09-11-2007, 02:48 PM
ThatScriptGuy ThatScriptGuy is offline
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How to record merchant account fees in quickbooks


OK, I've just purchased quickbooks to keep me better organized, and I've figured out a lot of it.

My one problem, however, is the invoicing/recording payments feature.

Ex: If I invoice a client for $500 and they pay me via paypal, a chunk of that is taken away by paypal fees. If I record that I received $500 in quickbooks, then it will show my bank account balance incorrectly.

I want to be able to see how much of my income is going to merchant fees.

My only idea on how to accomplish this would be to create a new expense account called Merchant Fees. Record the customer's payment, and then pay X dollars into the expense account, thereby taking it from my bank account. This would work, and will allow me to see exactly where my money is going, but I was just curious if there was an easier way...

Kevin



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  #2  
Old 09-11-2007, 03:15 PM
cywkevin cywkevin is offline
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You would have an expense account merchant fees as a sub account of selling and general administrative expenses and perform the debits and credits as you stated.

Credit banking for the fees, debit SG and A for the fees.

(Double entry system of accounting)

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  #3  
Old 09-11-2007, 03:20 PM
towerhill towerhill is offline
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cywkevin is correct. you can pretty much name the account whatever you want. "merchant fees", "service fees", or if you want really simple lump it in with "interest and service charges"

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  #4  
Old 09-11-2007, 04:25 PM
Nick H Nick H is offline
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I classify it under "Bank Service Charges"

BTW--I don't know how you're doing this, but the Daily Journal method works best for me when doing this.

It takes awhile to figure out how to balance it properly but once you do, you'll never have to learn it again.

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  #5  
Old 09-11-2007, 04:37 PM
ThatScriptGuy ThatScriptGuy is offline
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I also set mine up under bank service charges.

I'm slowly learning my way around quickbooks. I took quicken training in my accounting classes, but quickbooks seems to be a whole new beast...

Thanks for your help guys.

  #6  
Old 09-11-2007, 07:16 PM
mdaoust mdaoust is offline
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I would recommend not putting it directly under bank service charges but under its own unique account (such as merchant expenses). Having a detailed record of your expenses is important whether you are doing your taxes, selling your company, or simply looking for places that you can add to your cash flow (merchant expenses are a great place to add to cash flow).

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  #7  
Old 09-11-2007, 07:24 PM
ThatScriptGuy ThatScriptGuy is offline
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It is in an account called Merchant Fees, which is a subaccount of bank expenses.

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