Help with posting invoice with fees

[bespokebyhowley]

Hello,
I’m trying to work out how to post an invoice and payment if the amounts are different?
The invoice is £16.65 but the customer paid by paypal so I only received £15.88 to my account after they took off their fees.
How do I work this?
Thanks

[QFMathew]

Hello @bespokebyhowley

You would typically use a holding account for this which would act as the payment provider (in your case, PayPal).

We have a detailed guide here:

Accounting for income from a payment service provider

Introduction This guide will help you to reconcile payments from the likes of PayPal, GoCardless, Stripe along with any credit card PDQ service provider and more broadly any payment provider that collects income on your behalf and pays you the net amount, minus their fee. It’s a very common scenario in accounting and it’s very useful to know how to account for these types of transactions. The Basics Obviously the key thing here is that the amounts received don’t exactly match your invoices, and…

In summary, you would have 3 transactions for every 1:

• The full payment from the customer (in the holding account)
• The fees paid to the supplier (also in the holding account)
• The balance paid to you (transferred from the holding account to your current account).