Cash Back at the Cash Register

[Lee_Atkinson]

Hi, Just looking at options for using Quickfile for our Social Club to move away from complex spreadsheets.
As such, on a sale at the cash register we often give cashback, for instance, 1 drink £2.50, customer wants £10 cashback , so the sale is £2.50 , £12.50 is taken on credit card.
£10 from the till is given to the customer.
The Card Payment service would then pay to bank £12.50 minus their fee.
We obviously dont want vat/tax or include the £10 as a sale.
Just wondering how best to show and account for this?
Can I have a cash register account I suppose that I record £10 against but it cannot be part of sales?
Many Thanks

Lee

[Lee_Atkinson]

I see that I can make a transaction “money out” in Petty cash bank account.
If not invoiced then not vat’able
Then need to link to money in on bank account card services Im thinking?
Would this be correct do you think?
Thanks in advance.

[ian_roberts]

If you’re recording your sales with the cash register tool or similar then you don’t have to do anything special. When I give cashback it goes through the EPOS as a sale for £2.50, customer tenders £12.50 on card and I give them £10 “change” in cash.

So come the end of the day if I’ve made, say, £50 of cash sales plus and £20 of card sales, and one person took £10 cashback then the Z read will say total sales £70, of which net cash £40 and card £30, and that’s how I record it in QuickFile.

[Lee_Atkinson]

Thanks for that, I was just wanting to tag it I suppose, say we have £100 sales and £50 cashback, when the card service provider pays back minus handling fee to the bank say £149.90 then, I’d tag that against the sales of £100 and the cashback transaction. Showing a 0.10p expense…without the tag to cashback it would be 49.90 profit and wouldn’t want that?
All new to me though and open to any suggestion, does it matter that not tagged? Not sure?

[ian_roberts]

In situations like this you need a separate merchant “bank account” in QuickFile to represent your card payment provider. The “cash register” tool I referred to above works by creating one invoice in QuickFile for the total sales on each Z reading (cash+card), and logging two partial payments for the cash and card amounts from that reading, with the cash going into the “petty cash” account and the card payments going into the card merchant account. Giving cashback simply increases the “card” total for the day and decreases the “cash” total by the same amount.

When you later receive the funds from the card provider in your current account you just treat that as a bank transfer, not as income. Similarly when you deposit cash at the bank that is just a bank transfer from petty cash to the current account.

Since each transfer from the card provider is slightly less than the actual card payment total you took, you will gradually accrue a non-zero balance on the merchant account. Presumably you get some sort of statement each month from the card provider saying what fees they’ve charged you, so when this arrives you can create a “purchase” from that information, and mark it as paid from the merchant account, and that should (if there’s been no errors along the way) account for the drift.

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The only time the above gets a little tricky is if you’ve paid out more in cashback on a given day than you took in as cash sales, so your net cash for the day is negative. In that case you probably just need to log all the day’s sales as card, and then manually create a bank transfer transaction to move the overhang from petty cash to the card merchant account. This reflects what cashback really is - taking money in as card payments and handing it back out in cash.

[QFMathew]

Hi @Lee_Atkinson

The way I would do this is to separate the cashback from the sales themselves, which would then exclude them from your income. Then you would tag the cashback as a transfer from petty cash to your merchant account.

Let me give an example, let’s say we have the following:

• Daily sales total £9,000 + VAT (£10,800)
• Daily cashback requests total £200.00
• My till had a float of £500.00, but £200.00 of this has been paid out in cashback

I have my invoice, as normal for my sales

For simplicity, let’s assume I took all payments by card, so this would go straight to my merchant holding account. I’m using a Square holding account in this scenario, but this could be anything, the name is just an example.

That’s the invoice paid, so now let’s take care of the cashback element.

In the merchant account I would now have the income from the daily sales (because I marked the invoice as paid). So now, I need to add in the cashback.

This creates a new untagged entry, which can simply be tagged as a transfer from your petty cash account.

This increases the income in your merchant account by £200.00 and decreases the balance in your petty cash account by the same amount. My petty cash account now looks like this:

The fees for the card merchant and the payout would just be treated like any other merchant account.

In summary, you have two transactions - one for the transfer to your current account (the payout), plus another transaction for the merchant fees.

Let’s assume the merchant take £50.00 in fees, with the balance of £10,950 being paid to my current account.

As @ian_roberts mentions, you tag the fee to a purchase invoice. The final transfer out is just tagged as a transfer to your current account (which should then also marry up with your bank statement).

However, I’m just thinking out loud here, so there may be an easier way. I’m not an accountant nor bookkeeper, so it may be worth clarifying this with them too.

Hope that helps!

[Lee_Atkinson]

That is great, thank you for your time and patience with this the both of you.
Definitely cleared my mind and let me know what is possible, and not too complex either by the looks of it?
I shall try it out.
Lee.