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aklyman
May 26, 2024
Question

Recording third-party fee subtracted from payment prior to direct deposit.

  • May 26, 2024
  • 1 reply
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I use a third-party company to manage my billing to some, but not all, of my clients. To put it simply, I submit my invoice to the third-party, they bill my client, collect the money, deduct a fee, and provide the remainder to my direct deposit.

I think I mark the invoice as paid in full, then make an expense for the fee. However, this does not line up nicely to the direct deposit value.

I'm learning bookkeeping on the fly for my new 1 person business, so any help would be appreciated.

1 reply

JaeAnnC
JaeAnnC
May 26, 2024

I'll be happy to walk you through recording third-party fees in QuickBooks Online (QBO), @aklyman.

 

Since you're using a third-party company for billing your customers, you can enter the fee as a negative amount on the Bank Deposits screen when depositing the payment. 

 

First, let's receive the payment for the invoice. Here's how:

 

  1. Go to + New and select Receive Payments.
  2. Enter the payment information and select the checkbox next to the invoice you'd like to apply the payment.
  3. Click Undeposited funds in the Deposit to dropdown.
  4. Click Save and Close.

 

Once done, deposit the payment into the correct account and enter the fee as a negative amount. To do that:

 

  1. Click + New, then Bank Deposits. You'll see the payment you entered in the Select Existing Payments section at the top.
  2. Put a checkmark to select the payment.
  3. From the Add other funds to this deposit section, enter the fee as a negative amount.
  4. Click Save and Close.

 

Please read this guide for more details: Enter a bank service fee while using a third-party merchant service in QuickBooks Online.

 

Additionally, here's an article for your reference in case you need to return a customer's money: Record a customer refund in QuickBooks Online.

 

Drop a reply below if you have clarifications or concerns about recording third-party fees in QBO. We'll get back to you right away to answer your questions. Take care and have a wonderful day ahead.

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