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Dealing with Bank fees

Hi I am new to all of this still and I have a payment that I have received from a customer. However we have been charged fees of 7 pounds.

When I try to deal with the payment from the uploaded statement I allocates the payment to the outstanding invoice. And shows the seven pounds as still outstanding.

How do we deal with the balance I was going to allocate via journals or was going to process a payment instead from our bank account to some other

What is the right thing to do

Hi @Asmaa

Is the £7 a transaction fee, similar to what PayPal charges for example?

If this is the case, take a look at this article. This should help:
http://community.quickfile.co.uk/t/handling-payments-from-merchant-accounts/8865

Yes I guess, the Natwest charges these fees when we get money from abroad

@Asmaa - Are the fees deducted before the money hits your bank account, or are you charged, for example, at the end of the month for the transaction?

If the money in full hits your bank account (i.e. €50 is deposited to your account as €50 with no fees deducted), I’d assume your bank issues you with a statement at the end of the month with a summary of these charges? If that’s the case, you can just tag the full amount to the invoice and account for the fee when you receive the statement.

Ok what happens is that I get £3000 but £10 is deducted as fees £10 so I get 2990. We get a notification breakdown of the payment and fee. When I then upload my statement and tag the invoice to the money it clears but then I have ae partial payment I need to clear

Hi @Asmaa

In that case, as per the guide I linked to above, you would have 3 transactions:

Money In
£3000.00 - Tagged to the invoice to be shown as paid in full

Money Out
£10.00 - Tagged to ‘Bank fees’ (either through purchase invoice or direct to the bank fees nominal code)

That should bring your account back in line with your statement, and the invoice fully paid.

Sorry I don’t think i have been clear

I only 2990 and obviously I have £10 which I need to clear from the customers account

However I am not sure how to deal with the partial payment. I was hoping that

Hi @Asmaa

You can delete the transaction of £2990.00, create a new one for £3000.00 and tag it against the invoice (so it’s marked as paid in full), and then create the £10.00 transaction as money out, tagged to bank fees.

The net value of those 2 being £2990.00.

thank you for the help, I am new to all of this and want to get into the habit of doing the right thing

No problem! :smile:

If you have a lot of these transactions, it may be worth looking at the guide I linked to above and creating a separate bank account to help keep track of them all.

If you need anything else, please let us know!

I have this all the time, what i do is mark invoice as fully paid and then in bank account log the bank fee as a separate transaction under “bank fees” as said above.

Now that you have already paid £2990.00 to that invoice you can just credit the outstanding balance of £10.00 so it clears from the customers account. It will give you the option when you click on credit note to reduce unpaid balance.

After 6 months (i think) you can write it off as bad debt but possibly thats not what you want to do.

Thank you charlotte much appreciated

Hi

I have the same issue as above, the invoice was for 930, however the bank charge for this was £20 so I received 910. I logged this 910 payment however as this is 20 short of the invoice total, it shows the invoice as outstanding.

I’ve read the above but can’t figure out how to create a credit of 20 and assign it to the invoice so that it shows as fully paid.

Thanks

Hi @squarechilli

Basically, the way you should look at this is it’s actually 3 transactions:

  • The client pays you the full amount
  • The bank / service provider takes their bit
  • They pay you the remaining part

Even if the bank have taken the fee, I would certainly opt for the separate merchant bank account as this keeps it cleaner - your bank statement matches what they provide and things can be viewed easily.

You would then have 3 transactions in the holding account:

  1. A transaction for the full amount (money in), in your case £930.00. This will be tagged to the invoice so it’s showing as paid.

  2. A transaction for the fee (money out), in your case £20.00. This will be tagged as bank fees or charges, or how you would normally deal with these.

  3. A transaction for the balance (money out), in your case £910.00. This will be tagged as a bank transfer from the holding account to your current account (assuming that’s where it was deposited).

Your bank balance should now equal to your bank and show the £910.00 arriving.

The knowledgebase article I linked to above will provide more detail on this for you, with screenshots.

I hope that helps!

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I get you, thanks for the explanation.

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I understand the reason for recording multiple transactions instead of one transaction. However, I am using an automated bank feed. Is it still a good idea to modify the transactions? Won’t that confuse the automated importer in future if in notices transactions that don’t seem to match the ones it sees?

I went for slightly different approach from what was suggested above - I did not use the merchant account, I simply deleted the transaction from the current account (which was the amount received minus the bank fee) and then created a new line for ‘money in’ for the entire amount and another line for ‘money out’ tagged as bank fees.
I use automated bank feed (from Starling) and noticed that later on (could have been the next day or maybe two days later) the original transaction reappeared in my QF current account. I deleted it just now and will keep monitoring to see if it comes back.
P.S.
I did the same exercise for a number of older transactions and only the latest was re-imported by the feed, so might be a one-off glitch.

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