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April 18, 2023
Question

Rolling reserve accounting

  • April 18, 2023
  • 1 reply
  • 0 views

Many merchant accounts use an account called “reserve” or rolling reserve" account, where they put a certain part of your income to cover chargebacks and refunds. How should i account for this? Normally i would split the arrived settlement into sales and processing fees paid but how should i handle this reserve, to wich account should i make an entry with it?

1 reply

paul72
April 18, 2023

Hi @ZsofiaKozma 

 

The easiest workaround for this would be to treat the reserve account as a Bank Account in QBO.

 

Payments come into the reserve account, then transfer to your 'live' bank account.  Any chargebacks/refunds can be made from the reserve bank account.

 

Hope this helps.