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.