How to resolve a debtor invoice paid with square & allow for the percentage charged on the invoice?

Hi info1937,

Thanks for posting in the Community!

You have the option to manually record the Square fees by editing the invoice, and add another line item for the fees, and enter fees in negative amount. Or, create a deposit transaction to record the square fees. First, check or create an expense account for the Square fee. Here's how:

1. Click on the Accounting tab.
2. Click on Chart of Accounts, (search merchant fee or square fee), if none shows create a new account.
3. Click on New.
4. Set Account type as Expense.
5. Enter Name like Merchant fee or Square fees.
6. Click on Save.

Next, is to create a Service/Non-Inventory item in your products and services list, make sure the income account field is set to the expense account created above. Here's how;

1. Click on the Settings icon.
2. Click on Products and Services.
3. Click on New.
4. Select Service or Non-inventory type.
5. Enter Name as Merchant fee or Square fees.
6. Under Income account, select the expense category created earlier.
7. Click on Save and done.

Then, create a deposit and record the fees in negative amount. Here's how;

1. Click +New button.
2. Click on Bank Deposits.
3. Select the payment.
4. In the Add funds to this deposit field, choose an account.
5. Enter a negative amount, under Amount.
6. Click Save and close.

Once done, if there is a downloaded payment in the For Review tab you can Match the transaction for that invoice.

For your reference you can also check this link for a comprehensive information about recording merchant fees or square fees in QuickBooks Online.

Keep me posted if you have other banking-related concerns or questions. I'll get back to help you the best that I can.