How To Handle Merchant Fees In QuickBooks Pro

If you accept payments from your customers, whether you’re using PayPal, Stripe, Square, or some other payment processor, you most likely are paying merchant fees. But how do you properly enter merchant fees into QuickBooks?

In this post, we’ll cover two different ways to enter merchant fees. We’ll explain what to do if your merchant account provider charges you per transaction or via a lump sum at the end of each month. This way, you can know how much money your business actually has, and you can be certain all of your information is correct for year-end taxes.

If you don’t have a payment processor yet but want to be able to accept online payments from your customers, visit our comprehensive merchant account reviews to find the best payment processor for your business.

How To Enter Merchant Fees Per Transaction

If you use PayPal, Square, or a similar payment processor, you are charged a certain percentage for each transaction you process. For example, PayPal charges 2.9% +$0.30/per transaction. Believe it or not, entering this information into QuickBooks Pro is actually fairly simple.

Before you begin, make sure you have created a designated expense account called “Merchant Fees.” If you’re not sure how to do this, follow the steps in our How To Enter Credit Card Charges In QuickBooks Pro post (only select “expense” rather than “credit card”).

Then, go to Customers>Receive Payments or find the “Receive Payments” icon on the home screen.

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Step 1: Select Your Customer

Use the drop-down menu to select the customer whose payment you are recording. QuickBooks will pull up all outstanding invoices attached to that customer and autofill information accordingly.

Step 2: Enter Payment Amount

Type in the exact amount the customer is paying.

Step 3: Select Payment Option

Choose how the customer is paying.

Clicking “More” will take you to payment methods like PayPal and Stripe (Note: if this is your first time recording merchant fees, click the “Add New” button to add whatever processor you use.)

Step 4: Edit The Date

Make sure the correct date is chosen using the drop-down calendar.

Step 5: Enter A Reference Number (Optional)

If you have a reference number, you can enter it now.

Step 6: Add Any Additional Info

Now you can add any extra info, like the original amount, amount due, and a memo.

Step 7: Go To Record Deposit

Now return to your home screen. You should see a red notification on the “Record Deposit” icon. Click on it.

Step 8: Select The Transaction

Click next to the payment we just recorded. Once you see the check mark, click okay.

Step 9: Select Your Merchant Fees Account

On the line directly underneath the payment you recorded, select your merchant account.

Step 10: Enter Merchant Fee

Enter your merchant fee using a negative number. QuickBooks will automatically deduct the merchant fee from the total payment.

Step 11: Record Your Deposit

Double check that your screen looks correct and that the total on the bottom right-hand corner appears correct. Then click “Save & Close.”

Repeat this process as many times as needed until all of the merchant fees for each payment are properly recorded.

How To Enter Merchant Fees As A Lump Sum

It’s rare, but some processors, like Fattmerchant, charge a monthly merchant fee. If this is the case for your processor, go to the “Check Register” icon on the home page or go to Banking>Use Register and then select the account you use to pay merchant fees.

Step 1: Edit The Date

Make sure the correct date is chosen using the drop-down calendar.

Step 2: Choose Your Vendor

Where it says “Payee,” use the drop-down menu to select the vendor you are paying.

Step 3: Select Your Merchant Fees Account

Where it says “Account,” use the drop-down menu to select your merchant fees account.

Step 4: Add A Memo (Optional)

You can add a memo to describe the payment if you’d like.

Step 5: Enter Merchant Fee

Where it says “Payment,” enter your merchant fee payment.

Step 6: Save

Click “Record” to save your entry.

Now your merchant fee is recorded correctly. You can rest easy knowing that your QuickBooks information is correct.

For troubleshooting issues, check out the QuickBooks Community or call QuickBooks directly. Don’t forget to check out the rest of our QuickBooks Desktop Pro 101 Series to learn how to reconcile a bank account, enter credit card charges, enter a bill, enter credit card payments, and more.

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