Invoice for $2779 Used square to pay Lost $70 Deposit of $2709 to reconcile $2779 How do account for payment fees leftover?

Hi there alchamberlain,

Accurately recording payments against invoices is an important step, especially when it comes time to reconcile your accounts. There are a couple of ways that you can account for the fees or deposits associated with your payments using QuickBooks Online. Let me go over those options with you.

From my understanding, it sounds like you sent your customer an invoice which was then paid using Square. Square charged you a $70 fee or deposit against the invoice, and you were left with a payment of $2709 against a $2779 invoice. If you're using the bank feeds feature in QuickBooks, you'll need to account for the Square deposit so that you can match the payment received against the invoice you created.

First you'll want to create an expense account for Square fees or deposits if you don't already have one. You'll find the steps to do that in this article: Add to or edit the Chart of Accounts. Once created, you'll be able to use this account to resolve the difference between the invoice and the payment while matching the transactions from the bank feed. Follow these steps to learn how to do that:

1. Navigate to the Banking or Transactions tab.
2. Select the tile for the bank account that the payment was deposited into.
3. Locate the relevant transaction in the For Review tab.
4. Click on the transaction and select the option to Find Match.
5. Choose the checkbox of the appropriate Invoice, then choose Resolve Difference.
6. In the Add resolving transactions field you can choose to Add new transaction.
7. Choose the new account you set up for Square Fees in the Category field.
8. Enter the amount of the Square deposit.
9. Hit Save and close to save your changes.

For more on this, check out the article below:

• How to account for Bank Fees when matching transactions in Bank Feed

If you're not using the bank feeds feature, you'll still need to account for the deposit or fees from Square so that when you do your monthly reconciliation the balance between QuickBooks and your bank statement match up. This fee from Square is an expense, and if you choose to, you can Add a supplier to represent Square, create an expense account, and enter a new Expense from the + New button in order to represent those fees. 

When choosing a new method to record fees like these, it doesn't hurt to consult with your bookkeeper or accountant. They may have some advice as to which method will work best for your business. If you don't have one already, you can use the Find a pro to help button from the My accountant tab to get in touch with a QuickBooks-certified accountant near you. This page is also where you'll find a field to enter your accountant's email address. If you're working with an accountant you can invite them to join you in QuickBooks this way. 

Let me know if you have any follow-up questions. I'm here to help!