Forum Discussion

NewlandPC's avatar
NewlandPC
Experienced User
4 years ago

Recording Payments Through Collection Agencies

I've recently collected payment from one of our debtors through a collection agency. Typically I would apply the amount through Receive Payment, however the collection agency has taken a commission f...
  • Tracey_H's avatar
    Tracey_H
    4 years ago

    Hi NewlandPC 

     

    Thanks for your post. One way to handle this would be to record the full invoice amount as the payment in Receive Payments, but tick the Undeposited Funds option. Then in Prepare Bank Deposit, click on Deposit Adjustment and allocate the fees to an applicable expense account. When you tick both transactions in the Prepare Bank Deposit window, the Total Deposit Amount will be the amount deposited into your bank.

     

    For example if the customer owes $2000 and the debt collector held $200 in fees. In Receive Payments apply $2000 as the payment amount. In Prepare Bank Deposit>>Deposit adjustment, allocate $200 to the expense account. Back in the Prepare Bank Deposit window select both transactions so the Total Deposit Amount is $1800.

     

    This is only one way to handle this situation so it may be worthwhile checking with your accountant to ensure it suits your business.

     

    Please let me know if you need further help.

     

    If my response has answered your enquiry please click "Accept as Solution" to assist other users find this information.

     

Tracey_H's avatar
Tracey_H
Former Staff
4 years ago

Hi NewlandPC 

 

Thanks for your post. One way to handle this would be to record the full invoice amount as the payment in Receive Payments, but tick the Undeposited Funds option. Then in Prepare Bank Deposit, click on Deposit Adjustment and allocate the fees to an applicable expense account. When you tick both transactions in the Prepare Bank Deposit window, the Total Deposit Amount will be the amount deposited into your bank.

 

For example if the customer owes $2000 and the debt collector held $200 in fees. In Receive Payments apply $2000 as the payment amount. In Prepare Bank Deposit>>Deposit adjustment, allocate $200 to the expense account. Back in the Prepare Bank Deposit window select both transactions so the Total Deposit Amount is $1800.

 

This is only one way to handle this situation so it may be worthwhile checking with your accountant to ensure it suits your business.

 

Please let me know if you need further help.

 

If my response has answered your enquiry please click "Accept as Solution" to assist other users find this information.

 

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