How to Record Merchant Service Deposits in QuickBooks
If you accept payments from your customers through credit cards, debit cards, or other online payment methods, you need to record those payments as merchant service deposits in QuickBooks. This will help you keep track of your income, reconcile your bank accounts, and avoid errors and duplicates.
In this article, we will show you how to record merchant service deposits in QuickBooks Desktop and QuickBooks Online, depending on whether you use QuickBooks Payments or not.
please note download this payment from merchant service deposits to be recorded in quickbooks
What are merchant service deposits and why are they important?
Merchant service deposits are the payments you receive from your customers through credit cards, debit cards, or other online payment methods.
When you process a payment from a customer using a credit card, debit card, or other online payment method, the payment goes through a merchant service provider. The merchant service provider charges a fee for each transaction and then transfers the remaining amount to your bank account. This transfer is called a merchant service deposit.
Merchant service deposits usually include multiple customer payments that are grouped together in batches. The batch amount may not match the individual payment amounts due to rounding or currency conversion. The batch date may also differ from the payment date depending on when the merchant service provider processes the transactions.
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Recording merchant service deposits in QuickBooks helps you track your income, reconcile your bank accounts, and avoid errors and duplicates.
By recording merchant service deposits in QuickBooks, you can:
Track how much money you receive from each customer and each payment method.
Reconcile your bank accounts with your QuickBooks accounts by matching the deposits on your bank statements with the deposits in QuickBooks.
Avoid errors and duplicates by ensuring that each customer payment is recorded only once and that the deposit amount matches the batch amount.
To record merchant service deposits in QuickBooks, you need to know how much money you received from each customer, how much fee you paid to the merchant service provider, and how much money was deposited into your bank account.
How to automatically record merchant service deposits in QuickBooks Desktop
If you have QuickBooks Payments, you can turn on the auto match and record feature to let QuickBooks group and deposit your customer payments for you.
QuickBooks Payments is a service that allows you to accept credit cards, debit cards, and other online payments from your customers directly in QuickBooks Desktop. If you have QuickBooks Payments, you can turn on the auto match and record feature to let QuickBooks group your customer payments each day and deposit them as a single bank deposit into your bank account. QuickBooks will also record the merchant service fees as an expense.To use this feature, you need to:
Step 1: Turn on automatic matching
Go to the Customers menu and select Link Payment Service to Company File. Sign in to your QuickBooks Payments account and follow the prompts to link it to your QuickBooks Desktop company file.
Go to the Edit menu and select Preferences. Choose Payments from the left panel and click the Company Preferences tab. Check the box next to Automatically record payments for QuickBooks Payments transactions. Click OK.
Step 2: Review and match the recorded deposits
QuickBooks will automatically record your customer payments as sales receipts and group them into bank deposits each day. You can review and match these deposits by going to the Banking menu and selecting Record Merchant Service Deposits.
You will see a list of deposits that QuickBooks created for you. You can click on each deposit to see the details of the customer payments and fees included in it. You can also compare the deposit amount and date with your bank statement.
If everything looks correct, you can click Match to confirm that the deposit matches your bank statement. QuickBooks will mark the deposit as matched and move it to the Matched Transactions tab.
Step 3: Fix any unmatched or unrecorded payments
If you see any deposits that are not matched or any payments that are not recorded, you can fix them by following these steps:
If the deposit amount or date does not match your bank statement, you can click Edit to make changes. You can also split or combine deposits if needed.
If you see any payments that are not recorded, you can click Add Payment to record them manually. You can also delete any duplicate or incorrect payments.
If you see any fees that are not recorded, you can click Add Fee to record them manually. You can also delete any duplicate or incorrect fees.
If you see any payments or fees that are recorded in the wrong account, you can click Edit Account to change the account.
Once you have fixed all the issues, you can click Match to confirm that the deposit matches your bank statement.
How to manually record merchant service deposits in QuickBooks Desktop
If you don't have QuickBooks Payments or prefer to do the work yourself, you can manually record your merchant service deposits in QuickBooks.
If you use a different merchant service provider or want more control over how you record your deposits, you can manually record your merchant service deposits in QuickBooks. This involves downloading your merchant service transactions, creating a bank deposit for each batch of payments, and recording the merchant service fees.
Step 1: Download your merchant service transactions
The first step is to download your merchant service transactions from your merchant service provider's website. You can usually download them as a CSV or Excel file. You will need this file to enter the details of each payment and fee in QuickBooks.
Step 2: Create a bank deposit for each batch of payments
The next step is to create a bank deposit for each batch of payments that you received from your merchant service provider. You can do this by going to the Banking menu and selecting Make Deposits.
You will see a list of payments that you have received from your customers but have not deposited yet. You can select the ones that belong to the same batch and click OK.
You will then see the Make Deposits window where you can enter the details of the deposit. You can use the file that you downloaded from your merchant service provider's website as a reference. You need to enter:
The date of the deposit.
The bank account where the deposit was made.
The total amount of the deposit.
The customer name, invoice number, payment method, and amount for each payment included in the deposit.
The name of your merchant service provider, the fee amount, and a negative sign for each fee deducted from the deposit.
A memo or note if needed.
You can also use this table as an example:
Date Received From Account Memo Payment Method Amount --- --- --- --- --- 06/20/2023 ABC Inc. Invoice #123 Visa $100.00 06/20/2023 XYZ Ltd. Invoice #456 Mastercard $200.00 06/20/2023 Merchant Service Provider Fee for batch #789 N/A -$10.00 Total $290.00 Once you have entered all the details, you can click Save & Close to record the deposit.
Step 3: Record the merchant service fees
The last step is to record the merchant service fees as an expense in QuickBooks. You can do this by going to the Vendors menu and selecting Enter Bills.
You will see the Enter Bills window where you can enter the details of the bill. You need to enter:
The name of your merchant service provider as the vendor.
The date of the bill.
The amount of the bill.
The expense account where you want to track the fees.
A memo or note if needed.
You can also use this table as an example:
Vendor Date Amount Due Account Memo --- --- --- --- --- Merchant Service Provider 06/20/2023 $10.00 Bank Service Charges Fee for batch #789 Once you have entered all the details, you can click Save & Close to record the bill.
How to record merchant service deposits in QuickBooks Online
If you use QuickBooks Online, you can connect your bank account and your merchant service account to automatically download and categorize your deposits and fees.
If you use QuickBooks Online, you can save time and avoid errors by connecting your bank account and your merchant service account to QuickBooks. This will allow QuickBooks to automatically download and categorize your deposits and fees for you.
Step 1: Connect your bank account and your merchant service account
The first step is to connect your bank account and your merchant service account to QuickBooks Online. You can do this by going to the Banking menu and selecting Add Account.
You will see a list of banks and financial institutions that you can connect to QuickBooks. You can search for your bank or merchant service provider by name or URL. You can also select Show more to see more options.
Once you find your bank or merchant service provider, you can click on it and enter your login credentials. You may need to complete some security steps to verify your identity. You can then select the accounts that you want to connect and click Connect.
Step 2: Review and match the downloaded transactions
QuickBooks will automatically download and categorize your transactions from your bank account and your merchant service account. You can review and match these transactions by going to the Banking menu and selecting B anking.
You will see a list of transactions that QuickBooks downloaded for you. You can click on each transaction to see the details and make changes if needed. You can also compare the transaction amount and date with your bank statement.
If QuickBooks finds a match for the transaction in your QuickBooks records, you will see a green Match icon next to it. You can click Match to confirm that the transaction matches your QuickBooks record.
If QuickBooks does not find a match for the transaction, you will see an orange Add icon next to it. You can click Add to add the transaction to your QuickBooks records. You may need to select a category, customer, or vendor for the transaction.
Step 3: Adjust the deposit date or amount if needed
If the deposit date or amount does not match your bank statement, you can adjust it by following these steps:
Click on the deposit transaction in the Banking menu.
Click on the Edit icon next to the deposit amount or date.
Make the necessary changes and click Save.
You can also split or combine deposits if needed by clicking on the Split or Combine icons next to the deposit amount.
Conclusion
Recording merchant service deposits in QuickBooks is an important task that helps you track your income, reconcile your bank accounts, and avoid errors and duplicates. Depending on whether you use QuickBooks Payments or not, you can choose to automatically or manually record your deposits in QuickBooks Desktop or QuickBooks Online. By following the steps in this article, you can easily record your merchant service deposits in QuickBooks and keep your books accurate and up-to-date.
Frequently Asked Questions
What is QuickBooks Payments?
QuickBooks Payments is a service that allows you to accept credit cards, debit cards, and other online payments from your customers directly in QuickBooks Desktop or QuickBooks Online. You can sign up for QuickBooks Payments by going to the Customers menu and selecting Get Paid Faster with QuickBooks Payments.
How do I reconcile my bank accounts with my merchant service deposits?
To reconcile your bank accounts with your merchant service deposits, you need to match the deposits on your bank statements with the deposits in QuickBooks. You can do this by going to the B anking menu and selecting Reconcile. You can then choose the bank account that you want to reconcile and enter the ending balance and date from your bank statement. You can then check off the deposits that match your bank statement and click Finish now.
How do I record a partial payment from a customer?
If you receive a partial payment from a customer, you can record it by going to the Customers menu and selecting Receive Payments. You can then choose the customer and the invoice that you want to apply the payment to. You can enter the amount of the payment and the payment method. You can then click Save & Close. QuickBooks will record the payment and reduce the balance of the invoice.
How do I refund a customer payment?
If you need to refund a customer payment, you can do it by going to the Customers menu and selecting Create Credit Memos/Refunds. You can then choose the customer and the items or services that you want to refund. You can enter the amount of the refund and the reason for it. You can then click Save & Close. QuickBooks will create a credit memo and ask you how you want to issue the refund. You can choose to apply it to an existing invoice, give a refund check, or process a credit card refund.
How do I change my merchant service provider?
If you want to change your merchant service provider, you need to cancel your current account and sign up for a new one. You can cancel your current account by contacting your merchant service provider and following their instructions. You can sign up for a new account by going to the Customers menu and selecting Get Paid Faster with QuickBooks Payments. You can then compare the plans and rates of different providers and choose the one that suits your needs. 44f88ac181
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