Reconciling GoCardless account

Support
1

Hi all,

I use GoCardless to collect customers invoice payments. GoCardless charge 1%, capped at £2 per transaction. So, if I raise a QF invoice to a customer for £100, GoCardless collects the money and passes on £99 to me. However, the invoice shows £100 but the bank statement shows £99. How do I account for the missing £1?

Cheers

Gary

2

I found this on the Knowledge base, and thought it may be useful

"If your gross sales don’t exactly match the amounts received due to
your provider debiting their fees from the balance and paying you the
NET amount… Then you will need to enter an
additional debit on your virtual payment service provider account and
tag that debit to a supplier invoice covering the related charge.

This methodology can also be used for handling payments from offline
merchant accounts like Barclaycard Merchant Services or Streamline.
Whenever you are receiving an aggregated amount for a group of
different sales then you can apply the methods discussed in this
guide."

1 Like
3

This is a very common scenario in accounting, the guide here (which @Parker1090 kindly reference ) I’m sure will help:

Handling Payments from Merchant Accounts

The basic premise is that you have another bank account setup on Quick File called something like “GoCardless Merchant Account” (it may already have been automatically created). This is where you tag all your invoices payments to (not the current bank account). You then typically have a lump sum transfer (less fees) that GoCardless make to your current account, this is entered on the new GoCardless Merchant Account as a transfer to the current account. You will eventually accrue a balance on the merchant account which will match the fees deducted by GoCardless, you can enter a single “money out” transaction to balance this off and tag it to a supplier called something like “GoCardless charges”.

Hope that helps!

4

Hi Glenn,

This does not work. The original customer invoice does not show as paid. Here is the payment I am trying to reconcile.

I received £995.84 from GoCardless which was the total of 3 invoice payments (£1,001.96) from 3 different customers, less the £6.12 GoCardless fees.

How is this dealt with so that the invoice payments show in each customers account, less the associated GoCardless fees?

Regards

Gary

5

So in your GoCardless merchant account enter the 3 “money in” transactions matching the gross amounts on the invoices. Then enter 1 money out transaction for £6.12 and another money out transaction for £995.84.

Now tag the 3 “money in” transactions to the respective customers/invoices. Tag the £6.12 as a payment to the supplier “GoCardless charges” and £995.84 as a transfer to your current account.

6

Hi Glenn,

Now that makes sense. Thanks!

Gary

1 Like
7

Hi Glenn,

The Problem - “I received £995.84 from GoCardless which was the total of 3 invoice payments (£1,001.96) from 3 different customers, less the £6.12 GoCardless fees”.

Glenns’ Solution -

  1. Setup a new Merchant Account called “GoCardless Merchant Account”.
  2. Setup a new supplier called “GoCardless Charges”.
  3. Enter into the GoCardless Merchant Account, 3 “money in” transactions matching the gross amounts on the 3 invoices. Then enter 1 money out transaction for the £6.12 fees and another money out transaction for the £995.84, the nett amount received.
  4. Tag the 3 “money in” transactions to the respective customers/invoices.
  5. Tag (ie, create ‘new purchase order’) for the £6.12 for the supplier “GoCardless Charges”.
  6. Transfer the £995.84 to your current account.

This worked fine but I need a couple of clarifications.

  1. To what standard accounting ‘category’ should I assign the GoCardless Charges?

  2. “Transfer the £995.84 to my current account”. I actually processed 4 GoCardless payments. When I transfered to my current account, 3 of the transactions found the matching entries in the current account so I tagged to them. The 4th transaction, for £995.84, failed to find the matching current account entry of £995.84! If I chose the other option “Create New Transaction”, I got a duplicated entry in the current account statement. How can I get the correct tagging?

When I looked for a ‘matching transaction’ via the GoCardless Merchant Account statement, QF brought up the wrong one.

Should I use this technique for monies received from/paid via my Paypal account?

Should I use this technique for monies paid out via my PeoplePerHour account? Here, you have to transfer monies into an escrow account, then release it to the person invoicing you.

Cheers

Gary

8

This would go to “bank charges”.

[quote=“GaryWilliams, post:7, topic:255”]
The 4th transaction, for £995.84, failed to find the matching current account entry of £995.84![/quote]

Go to your current account and locate the untagged transaction for £995.84. Tag this as a transfer to GoCardless Merchant account.

I’m not really sure how this company operate, but if they are holding money on your behalf then you would use the same sort of abstraction. Essentially you have a bank account in Quick File called “PeoplePerHour Holding account” to represent any movements. If you have any doubts I would have a word with your accountant on that.