Small loss on an invoice, how to account for it?

[QFBeth]

Hi Fred,

A very similar thing has been asked before, and I believe this response should help you:

@QFMathew

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!