Manage Commissions deducted at Debit card processing source for hotel bookings

Accounting
1

Dear Community,

I’m no accountant and have been struggling with how to manage commissions paid to Debit card processing here is the scenario

I receive a booking … Value £100 - I the invoice for £100 is raised at the time of the booking and the guest pays a 50% deposit via Stripe (£50) and and Stripe levies a commission charge of 1.4% (£0.70) and I receive £49.30 into my account. A week later the remaining fee is paid by the guest (£50 ) and again a 1.4% commission fee is levied with £49,30 received into my account.

So here is my problem I match the two payments received from Stripe in my bank account against the customers invoice. From the customers point of view they have paid in full. from QF invoice point of view there is an outstanding payment due of £1.40

How do i allocate this £1.40 to Commission and mark the invoice as fully paid and in a way that at some point I can run a report on total commission charges in any period?

Any help appreciated

2

Hi @amrrichards

This is quite a common scenario, and you’ll be glad to hear that it’s one that trips a lot of people up.

The way to handle this is to create a holding bank account on QuickFile which would be treated as the money that your payment processor (in your case, Stripe) has on your behalf.

In this bank account, you basically end up with 3 transactions for every 1. I’ll give you an example:

  1. £50.00 IN tagged to the sales invoice
  2. £1.40 OUT tagged to purchase invoice for Stripe (the invoice is optional, but Stripe does provide a monthly invoice)
  3. £49.30 OUT tagged as a transfer to your current account

This accounts for the £50.00 your client paid, the fee and what you actually receive.

There’s more on this in our knowledge base, which should hopefully help. If you do need further help though, please don’t hesitate to ask.

3

In the case of stripe you wouldn’t need to account for each individual commission as a separate purchase. Just do the payments from customers into the stripe holding account and the payments you receive as bank transfers into your current account. Then at the end of the month stripe sends you a single invoice for all the fees they have charged you in that month, which you can enter as a single purchase on QuickFile paid from the holding account to balance things up.

Are you VAT registered?

4

Hi Ian

Thank you. I am not VAT registered.

I have heard of this approach before. But the money I receive from stripe per transaction from Stripe is still less that the customer invoice total. Do I therefore create a dummy entry(for the full amount) in this account as it were? and link these dummy entries to the invoices?

If I do that however, how do I reconcile (match) the Payments I actually receive from Stripe in the current account with anything… the amounts will still not match?

Sorry if im being stupid… Its a logic I find hard to follow?

Anthony

5

Ian

I think I have finally cottoned on… thanks for your advice…

Anthony

6

Hi Anthony,

Glad you got it sorted. Please let us know if you need further help. :slight_smile:

7

As you’ve presumably now worked out, the difference between the total of the invoices that your customers pay and the total amount you receive in your bank account is equal to the fees that Stripe has deducted. If you mark their fees invoice as paid from the holding account then that will account for the difference.