How to Enter a bank service fee while using a third-party merchant service?

    Asked on September 20, 2019 in QuickBooks.
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      If you accept payment from your customer, whether you are using PayPal or some other payment processor. And you are paying a merchant fee. But how do you properly enter the merchant fee in QuickBooks we will discuss in this article. 

      A merchant account is an account that allows the business to accept payment in multiple ways typically Debit card or Credit card. Many businesses have their own merchant account with the Merchant service provider and third-party merchant service is used in this type of account. You will work with the third party who has their own relationship with the merchant service provider and who have your merchant account. By utilizing a third-party payment processor you will be bypassing the step of having your own merchant account at a bank. This service allows you to use their merchant account to process all of your payments.

      If you are accepting credit card payment from your customer by using third party merchant service, then bank service fees that credit card company will deduct from the payment. therefore, the payment amount that shows on the bank register will not match the deposit amount in QuickBooks Online.

      if you know about the amount of the bank service fee, you can enter it directly into the register so that the register balance matches the bank statement balance, You will then enter the fee as a negative amount on the Bank Deposits screen when depositing a payment, after entering the bank service fee.

      How to record a bank service charge as a negative amount

      1. Click on Plus (+) icon, and then select Receive Payments.
      2. Place a check next to the invoice you would like the payment to be applied, after entering all the payment information.
      3. Select Undeposited funds as the deposit to the account.
      4. Select Save to record the transaction.
      5. Click on the Plus (+) icon and then select Bank Deposits.
      6. You should see the payment that you entered in the Select Existing Payments section at the top.
      7. That payment you want to deposit, place a checkmark to select them.
      8. In the deposit section, enter the amount of the bank service fee charged to you by the credit card company as a negative amount, From the Add other amounts.
      9. From the Account section, choose the Expense account you usually use in tracking bank fees.
      10. Verify, the deposit amount is correct.
      11. Select Save to record the transaction.

      Third-party payment service is that it helps you receive payments online from your customers without first setting up your own merchant account with a bank. It is quick and easy to set up.

      Answered on September 20, 2019.
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