How to enter bank fees for receiving Square payment for invoice

wbhutchins

I have Quicken Home, Business and Rental property version. I create invoices and then when I receive a check I enter it as a payment for the date it is deposited in the bank account. However, If I accept a credit card using Square Up and they charge me fees for using their service, I can't find a way to enter it without breaking the connection to my customer invoices. If I split the transaction and enter the bank fees so the correct deposit amount shows up, then it informs me that "This payment has been used to pay invoices. You changed it so that it will no longer apply to them. Do you want to change it anyway?" Obviously, I want the Schedule C and my invoice register to show correctly. Anyone know how to enter this without breaking my invoices?

Tom Young

I can tell you how to do this from a "pure accounting" standpoint but since I don't use the Home, Business and Rental version I'd only be guessing about the "correct" way to do this using QHBR.  But there is some Quicken "Help" information about fees associated with accepting VISA and MasterCard and perhaps you can use that information for Square.

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Merchant Account Services lets customers pay you by credit card. Your bank deposits this payment amount into your checking account several days after the customer pays you, so you'll want to add a cash account to keep track of the fact that your customer has paid you and your bank still owes you money.

How you process credit card payments depends on whether you use invoices. Select the appropriate option:

I invoice my customers

1. If you have not already done so, add a cash account.

   Why is this step important?

   Several days will pass between when your customer pays you by credit card and your bank deposits the payment amount into your checking account. The cash account will help you keep track of the fact that your customer has paid you and your bank still owes you money.

   You need to add only one cash account for each credit card that customers can pay you with.

2. Create an invoice for the customer.

   How should I fill in the fields?

   • In the Customer list, select the customer you created the invoice for.
   • In the Deposit To list, select the name of the cash account you added to hold your customer payments.
   • In the Outstanding Invoices area, in the Pay column, select the invoice this payment applies to.

     In the account with the invoice, manually record the customer payment.

3. In your checking account, record the deposit from your financial institution.

   How do I record a deposit?

   • Update the transactions in the register for your checking account.
   • Review your downloaded transactions and accept them into your register. In the Category field, be sure to select the cash account that you added to hold your customer payments. This transfers the record of the payment from your checking account to the cash account.

4. In your checking account, select the downloaded transaction for the processing fee and split the category before you accept it. To balance your accounts, you need to transfer the processing fee to the cash account. To categorize the transferred transaction, you must split the category.

   How do I split the category?

   Click the Category field of the transaction you want to categorize and click Split on the transaction toolbar. Then enter the following items on separate lines and click OK:

   • Line 1: In the Category list, select the cash account you added to hold your customer payments. The amount should be the value of the processing fee.
   • Line 2: In the Category list, select Biz Misc. The amount should be the value of the processing fee.
     • What if I don't have a Biz Misc category?
       You can create a new category. Make it an expense category and select Schedule C: Other business expenses in the Tax line item list.
   • Line 3: In the Category field, select Balance Adjustment. The amount should be the value of the processing fee.
     • What if I don't have a Balance Adjustment category?
       You can create a new category. Make it an expense category and leave the Tax line item list blank.

   
   

I do not invoice my customers

1. If you have not already done so, add a cash account.

   Why is this step important?

   Several days will pass between when your customer pays you by credit card and your bank deposits the payment amount into your checking account. The cash account will help you keep track of the fact that your customer has paid you and your bank still owes you money.

   You need to add only one cash account for each credit card that customers can pay you with.

2. In the cash account, manually enter a transaction in Quicken for the amount the customer paid you.

3. In your checking account, record the deposit from your financial institution.

   How do I record a deposit?

   • Update the transactions in the register for your checking account.
   • Review your downloaded transactions and accept them into your register. In the Category field, be sure to select the cash account that you added to hold your customer payments. This transfers the record of the payment from your checking account to the cash account.

     
     

4. In your checking account, select the downloaded transaction for the processing fee and split the category before you accept it. To balance your accounts, you need to transfer the processing fee to the cash account. To categorize the transferred transaction, you must split the category.

   How do I split the category?

   Click the Category field of the transaction you want to categorize and click Split on the transaction toolbar. Then enter the following items on separate lines and click OK:

   • Line 1: In the Category list, select the cash account you added to hold your customer payments. The amount should be the value of the processing fee.
   • Line 2: In the Category list, select Biz Misc. The amount should be the value of the processing fee.
     • What if I don't have a Biz Misc category?
       You can create a new category. Make it an expense category and select Schedule C: Other business expenses in the Tax line item list.
   • Line 3: In the Category field, select Balance Adjustment. The amount should be the value of the processing fee.
     • What if I don't have a Balance Adjustment category?
       You can create a new category. Make it an expense category and leave the Tax line item list blank.

   
   

Notes

• Information is also available about how to receive credit card payments through American Express.
• When you download deposits for more than one credit card payment, Quicken Payment Solutions can show you which payments were part of the deposit. Then you can reconcile the cash account where you record your payments to find out which deposits your financial institution still owes you.
• Sometimes a bank groups together several payments from the same customer into a single deposit. To keep your records straight, you might want to use the information from your paper statement or the Quicken Payment Solutions website to manually enter each payment separately.
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wbhutchins

I figured out a workaround until I hear from anyone. I just added an expense equal to the fee so the result is the same. It's just harder to reconcile the account doing that way.

Tom Young

I can tell you how to do this from a "pure accounting" standpoint but since I don't use the Home, Business and Rental version I'd only be guessing about the "correct" way to do this using QHBR.  But there is some Quicken "Help" information about fees associated with accepting VISA and MasterCard and perhaps you can use that information for Square.

------------------------------------------------------------------------------------------------------------------
Merchant Account Services lets customers pay you by credit card. Your bank deposits this payment amount into your checking account several days after the customer pays you, so you'll want to add a cash account to keep track of the fact that your customer has paid you and your bank still owes you money.

How you process credit card payments depends on whether you use invoices. Select the appropriate option:

I invoice my customers

1. If you have not already done so, add a cash account.

   Why is this step important?

   Several days will pass between when your customer pays you by credit card and your bank deposits the payment amount into your checking account. The cash account will help you keep track of the fact that your customer has paid you and your bank still owes you money.

   You need to add only one cash account for each credit card that customers can pay you with.

2. Create an invoice for the customer.

   How should I fill in the fields?

   • In the Customer list, select the customer you created the invoice for.
   • In the Deposit To list, select the name of the cash account you added to hold your customer payments.
   • In the Outstanding Invoices area, in the Pay column, select the invoice this payment applies to.

     In the account with the invoice, manually record the customer payment.

3. In your checking account, record the deposit from your financial institution.

   How do I record a deposit?

   • Update the transactions in the register for your checking account.
   • Review your downloaded transactions and accept them into your register. In the Category field, be sure to select the cash account that you added to hold your customer payments. This transfers the record of the payment from your checking account to the cash account.

4. In your checking account, select the downloaded transaction for the processing fee and split the category before you accept it. To balance your accounts, you need to transfer the processing fee to the cash account. To categorize the transferred transaction, you must split the category.

   How do I split the category?

   Click the Category field of the transaction you want to categorize and click Split on the transaction toolbar. Then enter the following items on separate lines and click OK:

   • Line 1: In the Category list, select the cash account you added to hold your customer payments. The amount should be the value of the processing fee.
   • Line 2: In the Category list, select Biz Misc. The amount should be the value of the processing fee.
     • What if I don't have a Biz Misc category?
       You can create a new category. Make it an expense category and select Schedule C: Other business expenses in the Tax line item list.
   • Line 3: In the Category field, select Balance Adjustment. The amount should be the value of the processing fee.
     • What if I don't have a Balance Adjustment category?
       You can create a new category. Make it an expense category and leave the Tax line item list blank.

   
   

I do not invoice my customers

1. If you have not already done so, add a cash account.

   Why is this step important?

   Several days will pass between when your customer pays you by credit card and your bank deposits the payment amount into your checking account. The cash account will help you keep track of the fact that your customer has paid you and your bank still owes you money.

   You need to add only one cash account for each credit card that customers can pay you with.

2. In the cash account, manually enter a transaction in Quicken for the amount the customer paid you.

3. In your checking account, record the deposit from your financial institution.

   How do I record a deposit?

   • Update the transactions in the register for your checking account.
   • Review your downloaded transactions and accept them into your register. In the Category field, be sure to select the cash account that you added to hold your customer payments. This transfers the record of the payment from your checking account to the cash account.

     
     

4. In your checking account, select the downloaded transaction for the processing fee and split the category before you accept it. To balance your accounts, you need to transfer the processing fee to the cash account. To categorize the transferred transaction, you must split the category.

   How do I split the category?

   Click the Category field of the transaction you want to categorize and click Split on the transaction toolbar. Then enter the following items on separate lines and click OK:

   • Line 1: In the Category list, select the cash account you added to hold your customer payments. The amount should be the value of the processing fee.
   • Line 2: In the Category list, select Biz Misc. The amount should be the value of the processing fee.
     • What if I don't have a Biz Misc category?
       You can create a new category. Make it an expense category and select Schedule C: Other business expenses in the Tax line item list.
   • Line 3: In the Category field, select Balance Adjustment. The amount should be the value of the processing fee.
     • What if I don't have a Balance Adjustment category?
       You can create a new category. Make it an expense category and leave the Tax line item list blank.

   
   

Notes

• Information is also available about how to receive credit card payments through American Express.
• When you download deposits for more than one credit card payment, Quicken Payment Solutions can show you which payments were part of the deposit. Then you can reconcile the cash account where you record your payments to find out which deposits your financial institution still owes you.
• Sometimes a bank groups together several payments from the same customer into a single deposit. To keep your records straight, you might want to use the information from your paper statement or the Quicken Payment Solutions website to manually enter each payment separately.
  ------------------------------------------------------------------------------------------------------------------

wbhutchins

Thanks Tom! That works perfectly.