How to record merchant account fees in QuickBooks?

The pro feature subscription of QuickBooks will let you handle records related to merchant account fees. Merchant accounts that are commonly in trend in the market are PayPal, Stripe, Square, etc. The general trend of how these merchant accounts function is:

● The user buys a particular product from your marketplace.

● He/she has a pre-configured account with any one of these merchant sites.

● During final checkout, the user logs in to the merchant account and pay for the product/service that they have purchased.

While accepting payments from these portals as a vendor, these merchant accounts charge a certain percentage for the ease of service. Hence, the vendor (i.e. you) ends up paying a fee. These are known as merchant account fees.

QuickBooks helps you manage merchant fees in a very efficient manner. In this blog, we talk about various types of fees that the merchant charges you and how you can manage them using QuickBooks.

Merchant fees can be entered in two different ways. A merchant may charge the vendor on a per transaction basis i.e. daily or every month. In the later process, you will be able to understand how much business is done and a cumulative calculation of year-end taxes is made easy.

The Process to enter merchant fees per transaction in QuickBooks:

While using a particular payment gateway from these merchants, the vendor is charged a certain amount as discussed earlier. PayPal charges 2.9 % of the billed amount + 0.30 USD for every successful transaction. Our objective is to enter this amount in QuickBooks Pro.

● The creation of an account that will be categorized as merchant fees is the first step in this act.

● On the home screen, go to customers and find the icon which says receive payments.

Step 1: Select your customer:

In the drop-down menu, the user has to select the customer name for which the transaction is being recorded. QuickBooks will fetch all the invoices of that particular customer that are unpaid and will use the auto-fill feature to fill in the required information.

Step 2: Enter the payment amount:

This field must be filled up by the exact value the customer is paying the merchant.

Step 3: Selecting the Payment Option:

In this step, choose how the customer is making the payment. In this case, we need to select the merchant gateway. Clicking on the more option will navigate you to PayPal or Stripe. If this is your first time while you are recording merchant fees, you can go to the Add New tab and add the processor to be used accordingly.

Step 4: Enter the date:

The drop-down calendar will help you get the exact date.

Step 5: Reference Number:

The reference number can be referred to as a discount coupon or a promo code. However, this step is optional.

Step 6: Add Additional Info:

If you need to add any additional information or memo, you can add it here.

Step 7: Record Deposit:

After this is done, when you return to the home screen, you will be prompted with a red notification on the record deposit icon. All you need to do is to click on it and proceed.

Step 8: Select the transaction:

You will then need to click next to the payment you just entered. As soon as the checkmark box is ticked, click on OK.

Step 9: Selecting the merchant account fees:

On the line below the payment record, select the Merchant Account option.

Step 10: Enter the merchant account fee value:

In the corresponding box, you will need to enter the merchant fees as a negative number. QuickBooks will automatically subtract the amount from the total transaction amount.

Step 11: Record your Deposit:

Just check in all the amounts and totals once more carefully and click on “Save and Close”. QuickBooks services will thus help you with the completion of the task. You can repeat the process for all payments received through merchant accounts.

Steps to enter merchant fees on a monthly/lump sum basis:

When the merchant you are dealing with gives an option for monthly payments, you will need to go with the following steps:

Step 1: Edit Date

In the drop-down calendar, choose the correct date.

Step 2: Choose the vendor:

In the Payee option, select the vendor you need to disburse the payment to.

Step 3: Select your account for merchant fees:

In the account section, select the merchant fees account from the drop-down menu.

Step 4: Adding of memo:

It is an optional step to add any information regarding the payment in the memo.

Step 5: Entering the merchant fees:

In the payment option, enter the merchant fees payment as per terms.

Step 6: Save your Work!

Finally, you will have to click on the record button to save your work.

Conclusion

QuickBooks Pro version makes handling merchants easy and smooth. This is a great feature as it helps to calculate results on the go.