How to Reconcile Merchant Fees

Many customers have asked us what are the best practices in reconciling Merchant Fees in QuickBooks. 

We do not recommend adding expenses to individual orders because it will incorrectly record sales tax liability, therefore, you cannot use QuickBooks to track sales tax payable in some tax jurisdictions. Talk to your CPA prior to adding expenses to individual orders.

We recommend adding the fees in bulk, to match your store's deposit in the bank.  Here are the steps:

Entering Negative Deposits as Expenses

Payment processors take two to three percent of each transaction as a processing fee. All of the orders the payment processor collects are transferred, in bulk, to your bank account, less their fees. You must match this bulk deposit to orders in QuickBooks, taking in to account their processing fees. These orders are located in the undeposited Fund Account.  

In this example, the orders total $425.00. The total Merchant Fees are $100.00. Here are the steps to add a negative deposit:

1.  in QuickBooks>Banking>Make Deposits

2. Choose the orders that will match your store's bulk deposit and click OK to add the orders to your deposit:

 

Match_bulk_deposit.png

 

4.  Make a negative deposit in the amount of your fees (in this case, $100.00). Assign it to the merchant Fees COGS account. Click Save & Close when done. 

 

Bulk_deposit_Fees_2.png

 

Your check register will look like this:

Bulk_deposit_Fees_3.png

 

And your P&L will look like this:

Bulk_depsoit_fees_4.png

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