Agent commission/Bank reconciliation

Hi, can anyone advise on best practice for bank reconciliation if invoices don’t match amount received?

For example, I invoice client directly for sale amount £100.
The client sends payment to my agent.
My agent sends me £90, after having taken their 10% commission.

So I am left with an invoice I have raised for £100 - but my bank account is only showing a £90 payment so it doesn’t link the two. When I try to tag the bank account entry, it can’t find the correct amount. I read somewhere online that I should put the agent commission down as an expense but I can’t find this on the banking section.

Any advice gratefully received - and the simpler the better!

Thanks in advance.

Hello @Smoo

You would set up a extra bank account for the Agent in the banking screen to reflect what has happened in real life, here is a breakdown of the transactions.

  • Pay the £100 invoice using this account
    This represents the client paying the agent the £100

  • Record a bank transfer from the agent account to your bank account for £90
    This represents the agent paying you the money less their commission

  • Record a purchase invoice for the agent commission fees and pay it using the agent account
    This is you paying the agent fees

Once complete

  • The agent account balance will be nil.
  • The sales invoice for the client will be paid in full
  • The purchase invoice from the agent will be paid in full

Thanks very much for the clear explanation, much appreciated. I’ll give it a go!