How to Record Credit Card Processing Fees in QuickBooks Online and Desktop?

Credit card fees are unavoidable when handling payments, but effectively recording them in QuickBooks is critical for accounting purposes.

Accurately recording these fees in QuickBooks makes it easier to monitor your financial situation and ensures that your revenue and expenses are appropriately represented.

Knowing how to enter these fees into QuickBooks will speed up your accounting procedures, lower error rates, and save time on reconciliations whether you’re an accountant or a small business owner.

This article will show you how to record these fees while using QuickBooks online and on the desktop to track your business’s income and expenses accurately.

How to record credit card processing fees in QuickBooks Online?

Recording credit card transactions in QuickBooks is critical to a book of accounts since it keeps an organization’s records accurate. If you’re using QuickBooks Desktop or QuickBooks Online, these transactions are useful for making sure your accounts are current. 

Indeed, the classification of debit card transactions is one of the most important factors in the process, especially if the payment is made immediately. 

These transactions are usually recorded under the right expense account depending on their nature (e.g., office supplies, utilities, and many others). 

In this step-by-step guide, you will learn how to enter debit card transactions in QuickBooks, whether they are immediate or delayed.

In order to account for Credit Card Processing Fees in QuickBooks, you need to follow the steps:

Step 1. Create an Invoice

1. Click on the “+ NEW” button at the top left corner of the screen.

2. Select “Invoice.”
3. Enter the details such as the customer’s information, products or services, and agreed-upon payment terms.

4. Click “Save and Send” once completed.

Step 2. Record Customer Payments (if submitted outside QuickBooks Online):

1. Navigate to the “Invoices” tab and locate the invoice for which you want to record a payment.
2. Select the invoice and click on “Receive Payment.”
3. In the “Deposit To” dropdown, choose the relevant account. If the payment is in transit, use the “Undeposited Funds” account.

Step 3. Record Bank Deposit:

1. Once the payment has been deposited, create a new bank deposit:
2. Click “+ NEW” and choose “Bank Deposit.”
3. Select the payment included in the deposit.

4. Under the “Adds to this deposit” section, input the credit card processing fee details, including account information, description, and the amount charged.

How to add the credit card processing fee to your invoices?

Including credit card fees on QuickBooks invoices ensures accurate financial reporting and transparent communication with clients regarding additional charges.

Methods to Add Credit Card Processing Fees:

1. Manually:
   • Go to the “Get Paid & Pay” tab on the left navigation bar.
   • Select “Products and Services.”
   • Click “New” and choose “Service.”
   • Enter the name of the service item.
   • Assign the appropriate account to track processing fees.
   • Click “Save and Close.”

2. Using a Third-Party App:

1. Log into your QuickBooks Online account.
2. Click on the “Apps” tab and search for an app that will integrate with your QuickBooks Online account.

Charging a Credit Card Processing Fee to a Customer Invoice:

Setting up credit card processing fees in QuickBooks requires careful navigation, which is crucial for business owners. 

Here are the steps on how to charge the credit card processing fees to the customer: 

First, create a service item and then manually add it as a line item to their invoice.

1. Click on “Sales” and then “Products and Services.”
2. Click “New” and select “Service.”
3. Enter the name of the service item.
4. Choose the account to track the processing fees under the “Income Account” dropdown.
5. Save the changes.
6. When creating or editing an invoice:
   • Add the fee item you created from the “Product/Service” dropdown.
   • Optionally, include a note about the fee in the “Message on Invoice” section.
   • Save and close the invoice.

When creating an invoice or using the existing ones, you can add it by the below mentioned steps:

1. Create a new or open the customer’s invoice.
2. Select the fee item you have created on the Product / Service dropdown.
3. You can add a note about the fee, under the Message on invoice section.
4. Click on Save and Close or Save or Send.

How to record credit card processing fees in QuickBooks Desktop?

Recording credit card processing fees in QuickBooks Desktop involves tracking transactions manually to ensure accurate categorization.
In order to record the card processing fee manually in QuickBooks Desktop ( QuickBooks Self-employed), kindly follow the steps:

1. Record the Payment Received

1. Open QuickBooks Desktop.
2. Go to Customers > Receive Payments.
3. Select the customer who made the payment.
4. Enter the payment details (amount received, payment method, etc.).
5. Ensure the Undeposited Funds account is selected if you plan to group multiple payments.

2. Record the Deposit and Processing Fee

1. Go to Banking > Make Deposits.
2. In the Payments to Deposit window, select the payment(s) you just recorded and click OK.
3. In the Make Deposits window, do the following:
4. Enter the full payment amount in the first line.
5. On the second line, add a new entry for the credit card processing fee:
   • In the Received From column, select a vendor or leave it blank.
   • In the From Account column, choose an expense account (e.g., “Bank Fees” or “Credit Card Fees”).
   • Enter the fee amount as a negative value (e.g., -5.00).

3. Save the Transaction

1. Verify that the Net Deposit Amount matches the actual amount deposited in your bank account.
2. Click Save & Close or Save & New to complete the process.

Conclusion

To guarantee appropriate representation and tracking of credit card fees within the financial records, entering them into Quickbooks calls for an ordered process. Acquiring proficiency in entering credit card processing fees into QuickBooks facilitates day-to-day financial management along with well-informed decision-making and strategic planning.

Credit card statements and recorded fees should be regularly reconciled to help find inconsistencies and preserve financial correctness. This allows firms to make well-informed financial decisions based on accurate information.

Disclaimer: The information outlined above for “How to Record Credit Card Processing Fees in QuickBooks Online and Desktop?” is applicable to all supported versions, including QuickBooks Desktop Pro, Premier, Accountant, and Enterprise. It is designed to work with operating systems such as Windows 7, 10, and 11, as well as macOS.