Many merchant accounts use an account called “reserve” or rolling reserve" account, where they put a certain part of your income to cover chargebacks and refunds. How should i account for this? Normally i would make an entry for the sales and minus the merchant account fees, but how should i handle this reserve, to wich account should i make an entry with it?
Isn’t this just part of the balance of payments you have taken but the merchant has not yet paid out to you? So it would be subsumed into the balance of the merchant account in QuickFile as the difference between payments from customers that have gone in minus settlement payments that have gone out?
And any idea on how to handle this in an accounting system wich doesn’t have the merchant account feature that quickfile has? Thanks for your help.
A merchant account is nothing more than an extra bank account in the accounting system, no different from if you have a current account and a separate savings account, or a “petty cash” account to represent the cash box. If the system allows for more than one bank account then it supports the standard workflow.
Create a new bank account to represent the merchant. When you take payment via the merchant you treat the customer payments as having arrived into the new account instead of into the current account. When the merchant pays you you treat that as a bank transfer between the two accounts. Any money that the merchant has withheld will show as a balance on the new bank account.
Thank you.
But wouldn’t this require me to record every payment separately into the merchant account in my accounting software?
I got an advice that i could just treat only the reserve account as a Bank Account, where payments arrive and in case of a chargeback it can be made from there, and of course after some time there is a transfer from this account to my current account. Would this also work?
Ian Roberts via QuickFile <quickfile-noreply@quickfile.co.uk> ezt írta (időpont: 2023. ápr. 18., K, 12:52):
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