You provide outstanding service for your customers, and they promptly and happily pay you with their responsibly used credit card. You wait maybe a couple days to see their payment show up in your bank account. Then you do see it… or something like it; something that’s almost the amount you invoiced them for… but not quite the amount. What shows up in the account is something less.
Well, this is probably due to your Merchant Service provider taking their cut of the sale. That’s perfectly fine and reasonable, but if it were me, a couple of really important things come in to play. Check out the video on how to account for those things and read below for reasons why this is important.
First and most important, I need to be able to give a thorough and accurate account of the entire process of following the money: From sales to cash in the bank, including payments received and expenses along the way. If I merely record Sales to my customer, then payments based on what shows up in the bank feed alone, the story is not complete. Either, QBO shows a remaining balance for my customer as if they had not paid their whole bill, or I can’t match the exact amount that came into my bank account; I can’t reconcile and more importantly, I can’t trust my reports. And if that were the case, how on earth could I know the financial health of my business or make wise decisions?!
We must bridge this gap properly.
And secondly, I’d want to see and track how much I am spending on Merchant Service Fees. If fact, I like to have a designated account in my Chart of Accounts for that very thing, so I create one.
So, every time I record customer payments that have used a merchant service provider, I follow the steps in the video to make sure to account for everything properly, including all the fees I am being charged, even though I don’t see them right away. I make the Unseen seen.
Thanks for stopping by! If you have any questions about this or anything else, let me know in the comments or the form below. Also, tell me what you would like me to cover next time!
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