Allocating payments received less merchant fee

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Allocating payments received less merchant fee

Sorry, I feel like this has been raised a thousand times before, but I cannot get my head around the best method for my application.

 

Case in point:

Invoice $1000

Deposit received $500 less fees

Merchant fee $8.75

Customer portion of fee $7.50

Residual payable by me $1.25

Payment received $498.75

 

I want to reconcile the bank acount payment received against the $1000 invoice to reflect the deposit of $500 and the customer fee payment of $7.50 as the customer has paid me $507.50.  I also want to give the customer a statement that shows these amounts so the invoice cant have any record of the extra $1.25 i have to pay.

 

But I also need to reflect the additional $1.25 that ive paid somewhere in the software.

 

This is also going to occur for the final payment as well.

 

I cannot see how make this work whilst still having a clean invoice/ statement to give to the customer??

 

Help!

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Re: Allocating payments received less merchant fee

No one at all?

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Re: Allocating payments received less merchant fee

Hi @bizzyb 

 

The way I would deal with that situation is through a holding account.

 

If you don't have a holding bank account one can be created through the following process:

  1. Go to your Business Name Menu (top right)
  2. Choose Accounts>>Accounts lists
  3. Select Add new
  4. Give the account a Number, Name, set the account to be Type and add a Tax Rate
  5. Select Save

Once you have that account set up you would be looking at adding the customer fees. This can be added as another invoice or as a separate invoice line on the original invoice. I would record this to an income account. The invoice would look something like the following:

 

Attachment.PNG

 

For the customer payments you want to go to Sales>>Take payment and record the payment for that customer as the full amount that they have paid i.e. $507.50. You want to ensure that Into account is that holding account:

 

Attachment2.PNG

 

You then want to deal with the holding account to the actual bank account. This would be through a Banking>>Recieve money transaction. You want to have the Deposit into account to be the main bank account, the allocate to accounts being the holding account amount and also the total merchant charge you paid:

Attachment3.PNG

What this process will do is:

  • Reduce the amount of the invoice to pay by $500 (now is $500)
  • Shows income of $7.50 as income for the fee
  • Shows expense of $8.75, which is an offset of the customer paid fee and the $1.75 you have paid for that fee
  • A deposit in the bank account for $498.75

I would recommend speaking with an accountant to ensure that the above process meets your reporting requirements.

Kind regards,
Steven

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