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Recording Credit Card Sales for Retail
How do I enter credit card sales for my retail business with no invoice?
I can enter them against a fake cash account but then both the credit card sale and the deposit that the credit card processor makes to my checking account show up in the profit and loss statement basically duplicating my income. If I only rely on the deposits made by the credit card processor, this doesn't accurately reflect my income as the credit card processor (American Express in particular) will deduct transaction fees.
I can enter them against a fake cash account but then both the credit card sale and the deposit that the credit card processor makes to my checking account show up in the profit and loss statement basically duplicating my income. If I only rely on the deposits made by the credit card processor, this doesn't accurately reflect my income as the credit card processor (American Express in particular) will deduct transaction fees.
I’m frustrated
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Inappropriate?I'd suggest recording the amount that comes to your bank account after the CC processor fee. Then record the bank fee as an expense, tag it with bank fee and put the title the date of the deposit associated to it. I wouldn't associate a bank with the expense since you're recording the deposit after the fee. This way the bank deposits will match when you do a bank rec.
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Inappropriate?That makes sense but if I only record the deposits from the bank, I can't accurately account for income from sales. For example, if I have 5 sales that occur on Dec. 31st but the bank deposit doesn't come until Jan. 2nd, I now can't accurately report my yearly gross income - the five orders will be incorrectly reported in the following year.
If I record each credit card sale as it happens (what I do now), I know exactly what my income was for that year. In my current system, MS Money, I only categorize the the credit card sales and not the bank deposits - essentially, this leaves the bank deposits off of my profit and loss statement.
Any thoughts on this? I am by no means an accountant so I may be hung up on how "I used to do things".1 Comment
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This is more of an accounting question than a question about the app. We try not to answer accounting questions because we don't know every tax law in every city/state/county/country across the globe. I would ask your local accountant or cpa how they'd like it setup.
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