How Do I Add Credit Card Processing Fees in QuickBooks Desktop?
Credit card processing fees are an unavoidable part of running a business. However, it can be tricky to properly account for these fees in your books, especially when using accounting software like QuickBooks Desktop. In this article, we will guide you through the process of adding credit card processing fees in QuickBooks Desktop, ensuring that your financial records are accurate and up to date.
Step 1: Set up an Expense Account
To begin, you need to create an expense account specifically for credit card processing fees. This will allow you to track and record these fees separately from other expenses. Here’s how you can do it:
1. Open QuickBooks Desktop and click on “Lists” in the top menu bar.
2. Select “Chart of Accounts” from the drop-down menu.
3. Click on the “Account” button at the bottom left corner and choose “New” from the pop-up menu.
4. Select “Expense” as the account type and click “Continue.”
5. Give the account a name, such as “Credit Card Processing Fees,” and provide a description if desired.
6. Click “Save & Close” to finalize the creation of the account.
Step 2: Create a Service Item
Next, you need to create a service item that you can use to apply the credit card processing fee to your invoices. Here’s how:
1. Go to “Lists” in the top menu bar and select “Item List.”
2. Click on the “Item” button at the bottom left corner and choose “New” from the pop-up menu.
3. Select “Service” as the item type and click “Continue.”
4. Give the item a name, such as “Credit Card Processing Fee,” and provide a description if desired.
5. In the “Account” field, choose the expense account you created in Step 1.
6. Set the “Amount or %” option to “Amount” and enter the fee amount.
7. Click “Save & Close” to finalize the creation of the service item.
Step 3: Apply the Credit Card Processing Fee to Invoices
Now that you have set up the necessary accounts and items, you can apply the credit card processing fee to your invoices. Follow these steps:
1. Create a new invoice or open an existing one.
2. Enter the customer information, products or services sold, and any other required details.
3. In the “Item” column, select the service item you created in Step 2.
4. Enter the fee amount in the “Amount” column.
5. QuickBooks will automatically calculate the total invoice amount, including the processing fee.
6. Save and send the invoice as usual.
Q: Can I apply credit card processing fees to sales receipts as well?
A: Yes, you can follow the same steps outlined above to apply credit card processing fees to sales receipts.
Q: What if I use multiple payment processors with different fee structures?
A: You can create multiple service items and expense accounts to track fees from different payment processors separately. This way, you can accurately record each fee based on its associated payment processor.
Q: Can I set up automatic calculations for credit card processing fees?
A: Unfortunately, QuickBooks Desktop does not provide a built-in feature for automatic fee calculations. You will need to manually enter the fee amount each time you create an invoice or sales receipt.
Q: How can I track credit card processing fees for reporting purposes?
A: QuickBooks Desktop offers various reporting options that allow you to track and analyze your expenses. You can run reports such as Profit and Loss, Expense by Vendor, or Expense by Account to review your credit card processing fees.
In conclusion, properly accounting for credit card processing fees in QuickBooks Desktop is essential to maintain accurate financial records. By following the steps outlined in this article, you can easily add these fees to your invoices or sales receipts and track them separately in your expense accounts. Remember to regularly review and analyze your reports to gain insights into your business expenses.