Merchant Discount Fees

[Christina]

We just started accepting credit cards. When I invoice my customer the total invoice amount includes the merchant discount fee that I will be charged. This fee is taken out of the payments before the money is transfered into my bank account. So the amount deposited for the sale is less than the amount invoiced. How do I clear the remaining balance for the invoice, so the customers account does not show an open balance?

[gibbo]

I would use a "Clearing" bank account. Post the full amount of the transaction to this account, write a "Dummy cheque" for the fees and transfer the balance into the real Bank account.

[Phil Ross]

I think you can also simply credit the whole amount of the credit card payment to the purchase order, and then treat the credit card fee as a bank fee by making a journal entry or entering a dummy check for the amount of the fee.

[Pam]

When you receive the payment enter the full amount; make sure the payment goes to undeposited funds. Then receive the deposit. In the deposit screen have a second line posted to your credit card expense and enter a minus amount. This way you have credited your customer properly and you will be able to reconcile the deposit to the bank.

[Joey]

The way that Pam told you is the correct way to process these transactions. You don't need clearing accounts and dummy checks.

[jasoncpa]

Ditto to Pam and Joey.

[reuelt]

I read "Handling American Express charges" in the help file then improvised the correct procedure for my MobileEFT transactions.


Cheers