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Lee Shin
December 31, 2021
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Question about revenue for Transfer Money Service

  • December 31, 2021
  • 2 replies
  • 0 views

  I really need this help to get correct report on Quickbook account and also files tax for next year.

 

 I do a transfer money service. Like a lot people want to transfer money to other country, they don't know how. I do then I get money from them + a small fee. Then use that money to transfer for them to their family in other contry. 

 I do a lot and make a profit on the small fee a get for every transaction. 

Example: My custome want to send 500 to her family in other country, I charge her $5 service fee. Total, she zelle me $505 in total. 

 My question is, how I report revenue? I slipt the $5 to the Service Fee Income, but how about $500? What will I do for this when this not my income? This money for transfer. Can someone help me about this to make sense and without any problem with file tax on IRS and no audit in future.

 

Thanks so much and have a nice day.

Best answer by GebelAlainaM

Good day, @Lee Shin.
 

I can help you record in which account you're going to use when you process the transaction.
 

When you receive the bank deposit, you'll record the $500 as a liability account because it's neither an income nor an expense, and the $5 processing charge as an expense. Then, because the $500 is recorded as a liability, it will effect the liability account when you transfer it.
 

I'd also suggest that you refer to your accountant for the best option and a detailed steps for they know what's best for  your company.
 

Here's how to create an account in QuickBooks Online:
 

  1. Go to the Gear icon and select Chart of Accounts.
  2. Select New in the top right corner. 
  3. Click on the Account Type drop-down to select the account type.
  4. Select the Detail Type to specify the type of account that you want to add.
  5. Enter the name of the account in the Name field.
  6. You have the option of including information in the Description field and an amount in the Balance field. 
  7. Then select Save and Close.
     

You can also refer to this article to learn how to add transactions directly to an account register.
 

If you have anything else to add or any clarification with your account register, you can post a reply and I'll get back to you. Have a happy new year in advance!

2 replies

G
GebelAlainaMAnswer
December 31, 2021

Good day, @Lee Shin.
 

I can help you record in which account you're going to use when you process the transaction.
 

When you receive the bank deposit, you'll record the $500 as a liability account because it's neither an income nor an expense, and the $5 processing charge as an expense. Then, because the $500 is recorded as a liability, it will effect the liability account when you transfer it.
 

I'd also suggest that you refer to your accountant for the best option and a detailed steps for they know what's best for  your company.
 

Here's how to create an account in QuickBooks Online:
 

  1. Go to the Gear icon and select Chart of Accounts.
  2. Select New in the top right corner. 
  3. Click on the Account Type drop-down to select the account type.
  4. Select the Detail Type to specify the type of account that you want to add.
  5. Enter the name of the account in the Name field.
  6. You have the option of including information in the Description field and an amount in the Balance field. 
  7. Then select Save and Close.
     

You can also refer to this article to learn how to add transactions directly to an account register.
 

If you have anything else to add or any clarification with your account register, you can post a reply and I'll get back to you. Have a happy new year in advance!

L
Lee ShinAuthor
January 4, 2022

Really thanks for your help, that is so make sense and I can easy to understand that. Thank you very much for this solution.

    KimMcCPA
    KimMcCPA
    December 31, 2021

    @Lee Shin ,

     

    If answers here could guarantee no problems with the IRS and no future audits, that would be wonderful... however, no online community can promise that, nor can any accounting platform.  To protect your business, licensing, employees, assets and customers, ALWAYS verify with your own trusted legal, tax and accounting professionals.  If you don't know of any, consider reaching out to others in your same line of business for recommendations.  

     

    Look into Escrow accounts (or similar Other Current Assets) for tracking funds that do not belong to a business.  Also, get familiar with the reporting capabilities of QBO very early on to verify that your accounts and subaccounts are set up to immediately answer the questions that you will encounter on a daily basis.

     

    Very best to you in 2022!

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