I just received notification of a customer disputing a charge for a purchase on our company’s credit card. In addition to the disputed amount, our credit card processor charges a $15 fee.
The dispute is currently filed but not resolved. However, the disputed charge amount and the fee have been withheld from the credit card processor’s weekly transfer to our bank account.
What are the correct entries to reflect this? It’s possible the dispute will be resolved in our favour, in which case the credit card processor will add the disputed amount back into our account and reverse the $15 fee. I think the process for that would just be a journal entry to reverse the original entries.
I assume you mean the customer is disputing a charge on their credit card, payable to your account.
If you are confident the dispute will resolve in your favor, show the bank transaction as Pending until it is resolved.
If there was an actual mistake and you owe the customer money, issue a credit note (if the receipt was against a sales invoice) or a payment (if the transaction was a cash sale, meaning non-credit).
If the resolution goes against you, and the sale was by sales invoice, you might decide to write off the transaction as a bad debt. See this Guide: Manager Guides.
The fee can be entered as a current payment to the card processor, posted to an account like Bank fees. If it is reversed, enter a receipt. Journal entries are not appropriate, because you cannot record movements of money in Manager with journal entries.