I was wondering how to best handle the customer payments that show up in the bank feed? The business is e-commerce physical products.
The customer payments mainly come through Bank - Stripe payment.
The Stripe payments often contain the shipping fee paid by the customer after deducting the Stripe processing fee.
Depending on the customer’s country, the VAT rate can be different. Although most of the customers are UK-based, hence the 20% rate rule applies.
What’s the best practice to handle this in the bank feed to ensure accurate VAT and P&L reporting? Should I disregard customer payments through bank feed and get the revenue details via Stripe or Woocommerce API?
Firstly, apologies for the delayed reply. It looks like your message got missed and only now picked up.
From your post, I understand that you’re selling products at different VAT rates, and the amount you receive also differs from their payment made because of Stripe fees.
First things first - the payments should be handled with a merchant bank account, which essentially breaks down the payment for the fee. This is the same for PayPal, Stripe, GoCardless, and any other online payment platform. We have a guide for this (which includes a video), here: Handling payments from merchant accounts.
If you’re using the Stripe feed, part of this is likely to already be done for you.
When it comes to the VAT element, assuming WooCommerce is already issuing the invoices for you, it’s just a case of accounting for the totals in QuickFile. In this case, you could either -
Have one invoice per VAT rate, or
Have one invoice with multiple lines for each VAT rate
Each invoice would then just be paid from the holding account, with the fees and transfers to the current account being tagged inline with the guide I linked to above.
I hope this helps, but please don’t hesitate to let us know if you have any further questions.