Handling merchant processing fee for payments

If your clients make payments through a merchant (say Paypal), some part of the payment may go to the merchant as processing fee and the actual payment you receive in your account is less by that amount. To handle such scenarios in Core, you should enter the payment and deposit it in full, like you would do for any other payment. Then you should cut a check to the merchant with an amount equal to the processing fee. To do so, follow these steps:

  1. Create a vendor for the merchant in order to be able to create the processing fee checks for them. Check the Core Help for details.
  2. Create the payment you received in Core with the full amount and the payment method as Credit Card, as the case may be. Check the Core Help for details.
  3. Create a deposit for the payment, like you do for any other payment. Check the Core Help for details.
  4. Now, write a check from the Accounting > Checks screen by clicking Create New at the top-right.
  5. On the Add Check screen, under Bank Account, select the account where you made the deposit in Step 3 above and under Payee, select the vendor you created for the merchant in Step 1. Use the same date for the check that you used for the payment.
  6. Go to the Accounts sub-tab, and under Account, select an expense account. You can create a separate expense account in the Chart of Accounts screen to log the processing fee expenses (say Credit Card Processing Fee).
  7. Enter the processing fee under Amount. Optionally, add a memo for reference and then click Done.
  8. Click Save. The processing fee is now logged as an expense and reflects in your accounting and reports.

Check the Core Help for details on writing checks.

Was this article helpful?
0 out of 0 found this helpful