Ronika Khanna shows two ways to handle credit card and payment processor fees in QuickBooks Online so your bank deposits match your invoices. The preferred method: add a negative line item to the invoice itself so the total reflects the fee deducted. Bank and Stripe fees are GST/HST-exempt.
Questions this video answers
$254.25 (invoice date Jan 1).
Downloaded deposit $241.25; fee allocated –$13 to Bank Charges.
Invoice original total $226; adjusted invoice/deposit amount $219.63 after adding a –$6.37 Bank Charges line (invoice date Jan 15).
No — bank charges/Stripe fees shown as purchases are tax-exempt (no GST/HST).
Chapters
Hello, everyone. Today we are going to look at adding credit card fees to an invoice so that it matches the deposit. Often these deposits are from Stripe or PayPal or QuickBooks Online Credit Card services. And the fee is generally taken at source. It is deducted from the total deposit. So you want to be able to match the payment to the invoice. But of course the amount isn't the same. So let's go through the process. For the first step, we're going to enter an invoice and then I am going to show you two different ways in which you can reflect the credit card fees. So if we go to.
Sales invoices, I'm going to open this link in a new tab.
And that way I can look at both at the same time and not have to go back and forth. So let's create an invoice.
We're going to select a customer adversary company. So let's sell them some audio recording devices. The quantity of this will be two and I'm going to give them a discount of 10%. So you'll see the total amount of the invoice is $254.25, which includes HST. Also, the invoice date is January 1st. Let's do that because the date of the downloaded transaction is January 26th. And we're going to assume that they paid a couple of weeks after we sent them the invoices. So let's just save and close this for now.
And now when I go to my bank transactions and if I click anywhere in the transaction, it, it opens up the details relating to the transaction. Click on Match. And here all of your unpaid invoices show up. So if we scroll down to the bottom, I can see the invoice that I just created. And so that is going to be the one that we are going to pay. You'll see now that QuickBooks automatically assigns the amount of the downloaded deposit $241.25. However, I want to fully pay this invoice because I know this $241.25 actually includes fees. So in this case I am just going to enter 254.25 and then you'll see down here I actually have a difference of dollars. QuickBooks actually allows me to resolve this difference and allocate it to an account directly within this Match interface. So I simply toggle this resolve button and then it opens up another section where you can choose the category of the difference. And we know the difference are bank charges or Stripe fees. So I'm going to enter bank charges. If you have enough stripe transactions, I recommend entering and creating an account called Stripe Fees, which could be a sub account of your bank charges. If the class and location applies, you can enter that. In our case, it doesn't really matter and we are going to put in minus $13 and you'll see this difference goes away.
And the GST.
HST on this transaction is exempt and it is purchases, because bank transactions, bank charges, strip fees, etc. Are always exempt. There is no GST HST on them. So now you have a fully matched transaction. This invoice is completely paid and will show up as fully paid. And you have allocated the difference to the bank charges account. So we'll click on match and that's it.
So now when we go to the transaction itself, when we go to invoices, we can see that this invoice is reflected as deposited and there is no balance remaining.
So let me show you the second way, and I prefer the second way just because I have a little more control over how it shows up in my accounting. So let's go in and create the next invoice, which is going to be for the 200 1963. And generally speaking, we'll have already created the invoice and you are simply going to edit it to match the amount of the fees.
So if I go to invoices, I can also go to this plus over here, create an invoice.
And we are going to select adversary co. Again, the invoice date. In this case, let's select January 15th and let's say we gave them some consulting services that cost $200.
So now the total amount of the invoice is $226. And that is what we need to collect from them. So we're going to save that.
Now, if we go back to the bank transactions, you'll see here that it's 219 63. So I want to actually make the amount of the Invoice equal to $219.63, because I know the difference is bank fees. So in this case, in the second example that I'm showing you, I'm going to actually modify the invoice. And to modify the invoice, you simply go into the invoice that we just created, click on edit, and then you can enter a second line which are the bank charges. So I am going to enter the bank charge on line two by creating a new item called bank charges. And once you create it, then it will Be there and in the future. So let's add bank charges. This pops up. Bank charges are normally a service. They are not inventory. And really what you have to enter is the account the bank charges relate to, which is bank charges. And even though it says income account, you can also put in expense accounts and you want this to be reflected in the expense account, which is bank charges. And then sales tax is exempt. That is automatic because that was already set up in the chart of accounts and this was the default sales tax. So let's save and close this. And now we have bank charges. We're going to pull one. And our total invoice is 226, while the amount of the deposit is 21963. So I can simply put 226 minus 219.63 and you can calculate it directly in this little box here. It's actually a cool feature of QuickBooks. I have a separate video on that, but you can see it right here. Since this is a deduction, I have to put a minus in front of it. And your whole invoice can't be a negative, but you can actually have negative deductions from the total of your invoice. So I'm going to put that and then it automatically shows up at 6.37. I can take out the rest of the zeros here because we just don't want the client to see that. And the sales tax in this case is exempt.
And you'll see now my total is 21963, which is the amount of the Stripe downloaded deposit. So I'm simply going to save and close this.
And now when I go back to Stripe, if I just refresh this page, it should have detected the invoice and it should match to it automatically.
And we can see that it has. We just kind of click on this, make sure that it is matching to the right invoice, and then simply click on match.
And that's it. So look, either way is good. As indicated, I do prefer the second way because I can choose at the type of transaction that is reflected on the invoice and I can see it directly on the invoice, so it becomes easier to track. But the first way is fine too, especially if you don't have a lot of transactions. If you do have a lot of Stripe transactions, then you might want to use the second way. But in this case it is useful to enter the invoices individually again so you can see exactly what you're billing for. So that is the end of this tutorial, please subscribe. And if you have any questions, don't hesitate to leave a comment. Have a great day.
