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  #1  
Old 09-21-2016, 04:01 PM
tvmangum tvmangum is offline
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Credit card sales and fees

Our PTA just started accepting credit cards and we took some payments last night via credit cards. I know the total sale amount along with the card fees and what will be deposited into the bank.

I am thinking the best way to handle this is to enter the income into QB based on the "after fees" deposit amount. Should I create a new item in the COA for credit card fees, enter in the total amount of sales and use a split transaction to put the income in the income correct line item and expense the fee out to the new expense account.

For example on a $26 purchase we pay around $0.70 in fees. Do I just put the $25.30 in as income and forget about the $0.70 in fees or do a deposit of $26.00 total and split the transaction as $25.30 income and $0.70 in expenses?
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  #2  
Old 09-22-2016, 04:46 AM
Rustler Rustler is offline
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$26 is income, $.70 is expense
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  #3  
Old 09-27-2016, 07:05 PM
Lorin Browning Lorin Browning is offline
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I agree with Rustler. Entering only the net amount received does not allow the board to track what it costs for the PTA to use the credit card. That cost could be important to the board in evaluating its credit-card-use strategy.
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  #4  
Old 09-27-2016, 07:56 PM
tvmangum tvmangum is offline
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My only concern doing it this way is that when the funds are deposited into the bank it will show $25.28 as being deposited instead of $26.00 income and $0.72 as expense. Wouldn't that throw off the reconciliation process?

I can get reports from Square that list the fees we paid each day that we use the device.
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  #5  
Old 09-27-2016, 10:39 PM
Lorin Browning Lorin Browning is offline
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Sales less expense equals deposit. You are missing the fact that the sales amount does not equal the deposit amount. There are three entries required, not just the two you were asking about.

Here are the three entries:
  • Credit to Sales for 26.00
  • Debit to Deposit for 25.28
  • Debit to Expense .72
The point that Russell and I were trying to emphasize was that the expense has to be included to present a full picture of the transaction.
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  #6  
Old 09-29-2016, 10:59 AM
Lorin Browning Lorin Browning is offline
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Just a little more:

My wife just started using Square for one of the not-for-profits for which she is treasurer. Here are her recommendations:

Use the QuickBooks Make Deposit screen.
The Deposit to box automatically posts the net deposit to the appropriate bank.
  • On the first line of the form, the FROM ACCOUNT column will be the appropriate revenue account. It could be something as generic as Sales or as specific as you wish to track if there are multiple fund-raising activities during the year. In any case, the FROM ACCOUNT must ties to an income (revenue) account. Under PMT METH, you could have Square as the source if desired. For AMOUNT, enter the total amount of sales as reported to you by Square.
  • On the second line of the form, the FROM ACCOUNT will refer to the expense account which you use to record fees paid to Square. The AMOUNT will be the amount of the Square fee entered as a negative number.
Printing the deposit slip will automatically post gross sales as income, post fee withheld from sales by Square as expense, and post net deposit to bank account.
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Last edited by Lorin Browning; 10-30-2016 at 10:38 AM.
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  #7  
Old 09-29-2016, 11:35 AM
tvmangum tvmangum is offline
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That is actually what I am doing now.

I got really concerned when you guys started talking about making the three entries (Credit to Sales for 26.00, Debit to Deposit for 25.28, Debit to Expense .72). I was concerned that I was doing something wrong by not depositing the money into an "Undeposited Funds" account and then moving money to the credit account then moving it to debits.

I'm starting a QB class in 2 weeks so hopefully I can get better at what I am doing and not ask so many newbie questions. Just want to make sure I am doing everything correctly.
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