Automating pre-deposit ecommerce & credit card fees

We use an ecommerce host to sell vegetables directly to local families. They charge a fee as well as credit card fees before making deposits in our bank account. In order to account for these expenses I am invoicing the company for total orders (pre-fees) on a monthly basis. Deposits are applied against AR and the balance equals the fees. The two approaches I have looked at are 1: Journal entries crediting AR and debiting to the Ecommerce Fees and Credit Card Fee expense account. This has the advantage of being able to be done once a month. 2. Writing them in on each deposit. So, increase the amount of the deposit by the value of the fees and include the fees as negatives. Both of these work I think. Any council about if there is a right or preferred method here.

Also, it’d be nice to automate this. I have heard of another farmer doing this with Quickbooks defining the fees as part of the item. I haven’t seen it myself though. It would work something like the Tax Code but instead of being automatically applied to Tax Payable it would be applied to the respective Expense Account and AR.

Thanks for any help.

You do not want to mix the fees charged by the host with the invoice to your customer, because they are with different entities. Additionally, one is a sale and the other is a purchase of services. So, if you are sending sales invoices to your customer, just charge them for the vegetables. When you receive the money, enter the e-commerce host as the payer. Post the full amount of the sales invoice to Accounts receivable and the customer’s subaccount. That will clear the invoice. Add an additional line with the fees, posted to an appropriate expense account, but enter them as negative amounts. (A negative receipt is equivalent to a payment.) If desired, the fees can be broken out into multiple categories, posted to separate accounts, as you hinted you might want to do.

On the other hand, if all these transactions are instantaneous (such as at a market), and you only deal with the e-commerce host, skip the sales invoice. Enter a receipt with goods sold at their full prices (and taxes). Add additional lines for the fees and enter those as negative numbers, exactly as if you were receiving money for a sales invoice.

You cannot automate this. But you can have Manager perform the calculations so you know what fees to enter. This would be fairly straightforward, since the fees would normally be constant percentages. See

You could streamline the entry of fee line items by defining non-inventory items for the various fees. You would still need to enter the amount (or the calculation), however.

Everything I’ve said ignores the possibility of importing a statement from the host. That would usually be broken down into transaction types and would probably lend itself to implementing bank rules.

We are not invoicing the customers. The host does that. The orders are for a membership of recurring weekly deliveries of produce (known as CSA or farm share) and often entail a payment plan. I don’t have detailed reports for the deposits so I don’t think the sales receipts would work.

I’m creating Sales Invoices for the host for the orders that they are liable to pay us for. Deposits are made weekly. However in doing so I’m treating a supplier as a customer. Would it be better to try and keep track of these details with negative balances in Purchase Invoices and Accounts Payable?

No, you are not. The host is your customer in these circumstances. You issue them a sales invoice and they pay you money as a result. Under these conditions, you actually have no accounting relationship with the member/subscriber/end-user.

The accounting is straightforward. Create the host as a customer. Issue sales invoices to the host for whatever has been sold, be that 10 bushels of turnips, 1 share of produce, or 1 week of food delivery. (As an aside, it is doubtful you want to manage any of those as inventory items, so set them up as non-inventory items.)

When the host pays you, create a receipt. As previously described, post one line to Accounts receivable for the full amount of each sales invoice included in the receipt. Enter negative amounts on additional lines for fees, posted to appropriate expense accounts. The total for the receipt will equal the amount remitted to you by the host. The sales invoices will be cleared, and your expenses will be properly recorded. (Note: I am assuming through all of this that when you refer to a “deposit” you are referring to a receipt deposited to your bank by the host.)

One caution: in your first post, you mentioned the option of increasing the amount of a deposit by the value of the fees. That would be incorrect. You want the negative entries for fees to decrease the total of the receipt, because the host is not paying you the full value of the receivable. So you invoice for the amount sold, receive the full amount invoiced on one line, and simultaneously reduce the amount received on another line through the negative entry. Do a trial entry and you will see what I mean.

I suppose in the interest of completeness, I should also say that I am assuming you are not trying to charge the member family for the host and credit card fees. However, if you want to do that, you would add those charges—as positive numbers—to the sales invoice. But then you are caught in a circle, because that will increase the fees the host charges back to you. Far better to simply factor those things into the prices you set in the first place.

Got it. I’ll keep issuing Sales Invoices. Yes, “deposit” is a receipt deposited to our bank account.

We also issue Sales Invoices and Receipts for transactions that happen outside the host platform, say restaurants sales or events. So I have been trying to figure out how to track the value of different items. We report on totals for individual crops for Organic Certification and the host provides totals through them, but then I need to be able to report totals for sales that have occurred outside of the host’s platform. Manager doesn’t run reports on non-Inventory items so leaves me w/ either opening invoices and adding items totals up manually or trying sort out Inventory. I’m not sure what to do.

Thank you!

Farming is a tough business to account for. You can certainly handle produce as inventory items. But you don’t buy it from anyone, it is perishable, and yet you’d probably like to monitor how much it costs to produce a crop in seed, fertilizer, hail insurance, irrigation expense, etc. So you could enter production orders, but a week after harvesting, you’ve got nothing but compost if you can’t sell it. So you would be into write-offs, etc. Some of these factors push you towards not tracking inventory of vegetables. But unless you do, you won’t be able to take advantage of reports.

You are also probably harvesting in units of pounds, bushels, crates, or flats, then selling in units of bunches, eaches, baskets, or ounces. That makes for tedious conversions.

Personally, I think farming is a niche where dedicated, market-specific accounting software might be a better choice than a general purpose product like Manager. There have been quite a few discussions on the forum about farming over the years. I can’t recall any where solutions seemed good.