[GNC] How to account for credit card fees

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[GNC] How to account for credit card fees

Andres Aviles
   Hello all -

   This is my first post.  So far I love GnuCash !

   I run a small business and accept credit/debit cards using the Square
   app.  They take out the fees before they deposit the money received. I
   have imported my credit union statements which includes the deposits
   made by Square. But how do I account for these fees in GnuCash that
   Square takes out before the deposit ? I'm using version 3.5.1 right
   now.

   Thanks.

   Andy A.
   [hidden email]
   "Try to be a rainbow in someone's cloud" Maya Angelou
   Words to live by -
   * Love has no gender, love has no race, love has no disability and love
   has no age
   * Forget the bad, and focus on the good.
   * Love the people who treat you right, pray for the ones who don't.
   * Life is too short to be anything but happy.
   * Falling down is a part of life. Getting back up is living.
   * Forget yesterday - it has already forgotten you.
   * Don't sweat tomorrow - you h
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Re: [GNC] How to account for credit card fees

Adrien Monteleone-2
Andy,

Welcome to GnuCash!

First, For *all* accounting questions, I can’t stress enough...speak to a local CPA about how to do your accounting. (they can offer better answers with respect to your local laws, tax jurisdiction, and business entity type) A surprising fact most people do not know is that CPA’s are not out for your arm, leg, or first-born. Most initial consultations are *really* cheap considering the advice. You could make costly mistakes for years without them. And don’t be afraid to ‘interview’ them for the ‘job’ of advising you. That is what they aim for.

But the generic answer is:

Record the revenue earned either manually, or using the invoice feature.

(manual example here:)

Dr. Assets:Current Assets:Accounts Receivable
Cr. Income:Sales

Record the customer’s payment via Square for the full amount against that receivable and account for the fee since you know it at this time, let’s say 3% on $100.

(another manual example)

Dr. Assets:Current Assets:Square $97
Dr. Expenses:Processing Fees $ 3
Cr. Assets:Current Assets:Accounts Receivable $100

If due to timing of transactions, you don’t know the fee, or you know it, but it is not realized instantly (say an aggregate is charged on the monthly statement), then let us know and I or someone else can offer alternative transaction examples. You may need to employ other intermediate ‘holding' accounts.

Regards,
Adrien


> On Apr 12, 2019, at 1:28 AM, Andres Aviles <[hidden email]> wrote:
>
>   Hello all -
>
>   This is my first post.  So far I love GnuCash !
>
>   I run a small business and accept credit/debit cards using the Square
>   app.  They take out the fees before they deposit the money received. I
>   have imported my credit union statements which includes the deposits
>   made by Square. But how do I account for these fees in GnuCash that
>   Square takes out before the deposit ? I'm using version 3.5.1 right
>   now.
>
>   Thanks.
>
>   Andy A.

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Re: [GNC] How to account for credit card fees

Jeffrey Black
In reply to this post by Andres Aviles
On 4/12/2019 1:28 AM, Andres Aviles wrote:

>     Hello all -
>
>     This is my first post.  So far I love GnuCash !
>
>     I run a small business and accept credit/debit cards using the Square
>     app.  They take out the fees before they deposit the money received. I
>     have imported my credit union statements which includes the deposits
>     made by Square. But how do I account for these fees in GnuCash that
>     Square takes out before the deposit ? I'm using version 3.5.1 right
>     now.
>
>     Thanks.
>
>     Andy A.
>     [hidden email]
>     "Try to be a rainbow in someone's cloud" Maya Angelou
>     Words to live by -
>     * Love has no gender, love has no race, love has no disability and love
>     has no age
>     * Forget the bad, and focus on the good.
>     * Love the people who treat you right, pray for the ones who don't.
>     * Life is too short to be anything but happy.
>     * Falling down is a part of life. Getting back up is living.
>     * Forget yesterday - it has already forgotten you.
>     * Don't sweat tomorrow - you h
> _______________________________________________
> gnucash-user mailing list
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> To update your subscription preferences or to unsubscribe:
> https://lists.gnucash.org/mailman/listinfo/gnucash-user
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> You can do this by using Reply-To-List or Reply-All.
> .
>
You'll have to pardon me if I get tongue twisted.  I'm operating on a 72
hour straight crunch time on taxes.

The fees are just an expense of doing business, unless you are charging
your client a swipe fee (that can get messy real quick).

In its very simplest form, just create an expense account
(Business_expense:SQfees).  The fees will almost always go from your
bank account to theirs (funny how you never get to bill them for your
time swiping the card).

It gets a little trickier if you need to tie the fees to an exact
purchase/return.  That will require a split transaction (using the same
accounts), which you will more than likely have to do manually.

If you use a tax preparer then I would ask them how they would like it
set up.  Especially since those fees are possibly a legitimate
deductible expense on your taxes depending on your pricing structure.

--
--JEffrey Black M.B.A.

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Re: [GNC] How to account for credit card fees

Stephen M. Butler
In reply to this post by Andres Aviles
On 4/11/19 11:28 PM, Andres Aviles wrote:

>    Hello all -
>
>    This is my first post.  So far I love GnuCash !
>
>    I run a small business and accept credit/debit cards using the Square
>    app.  They take out the fees before they deposit the money received. I
>    have imported my credit union statements which includes the deposits
>    made by Square. But how do I account for these fees in GnuCash that
>    Square takes out before the deposit ? I'm using version 3.5.1 right
>    now.
>
>    Thanks.
>
>    Andy A.
>    [hidden email]

Do they have a payments file you can download?  My friend and I have a
storefront on Squarespace that uses Stripe for the credit/debit
processing.  Strip has a payments file that I can download as a csv.  It
has fields for the order-id, total product sold, shipping charges, state
and local taxes, their fee, net amt deposited.  I accumulate these in a
SQLite DB and tag by date on which the net is deposited (since they
combine all sales in a day to a single deposit).  So far I report the
totals by day and manually enter into GnC.  At some future date I'll
have the report generate a CSV file to import into GnC.

This works for me in the US.  Your needs/requirements may vary. 

--
Stephen M Butler, PMP, PSM
[hidden email]
[hidden email]
253-350-0166
-------------------------------------------
GnuPG Fingerprint:  8A25 9726 D439 758D D846 E5D4 282A 5477 0385 81D8


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