Hi, we will have invoices that are paid to a third party, and then to us once per month less any transaction fees. How can I set this up in Manager? So far I click “Receive payment” but that requires a bank or cash account. I’d like the invoice amounts to be in accounts receivable until we get paid, but invoices should still be marked “paid”.
May I confirming what you are trying to describe in my own words?
You have Invoice Client (A) amount of 10$,
The Client (A) Pays 10$ via Platform or payment gateway of Agent (B),
The Money is still with Agent (B), but you considered it as paid, since you have agreement with Agent (B) your entitlement of money owed to you minus merchant fee (processing fee 1$) which should be 9$.
If follow by case above, you need to create Asset account of Agent B Owes to you, Expenses account of Transaction,Processing, Convenient, Merchant fee whatever name of expenses suites the classification of expenses.
I know two ways of doing it but the one I’m gonna explain is the safest advice for myself. via Journal Entry tab. This is after you invoiced to the client situation.
1.Go to Settings>Chart of Accounts> Create Accounts under Balance Sheet section > Create Asset Named Third Party Accounts.
2. Go to Settings> Chart of Accounts> Create Account under Profit and Loss section > Create Expenses Named Fee for transacting or handling the payments.
3. To Journal Entries tab > New Journal Entry > add extra one Journal Entry Line, the rest you fill what is necessary like date, narration and so on.
4. Pick only 3 Accounts related, Account Receivable + The Customer + Invoice related, The Third Party Account, and The Handling fee/ Processing fee account.
5. Credit Customer+invoice related, Debit The Third party Account (amount entitled to you - Handling fee) and Debit Handling fee
So by the time the third party transfer the money to your bank accounts just do it normally in cash accounts but choose the third party accounts. not the account receivable.
Yes, this is exactly correct!
If it did not come out like you wanted, the moderators will assist you.
My English is bad though…
You could simplify that solution by creating the third party as a Customer.
Then when your customer pays the third party customer do a Receive Money.
On the first account line would be as per normal receive money - Acct Rec + Cust + Inv
On the second line you would do Accts Rec + Third Party Cust and enter amount as negative (minus sign)
The Receive Money will total zero and transfer the owing from customer to third party customer.
When third party pays you, put the full amount to Accts Rec + Customer and then add a line.
Enter the Fee Account and put the amount as a negative so the Receive Money equals actual money received.
If you wanted to keep track of the third party owing’s separate from other Accts Rec, then creats a custom control account and allocate the third party customer to that account.
Yes and that what I have in mind if using Manager’s current modular function. For a second choice, If I were a hi-c type of bookkeeper, I will separate it from account receivable as I consider the account receivable as main related to sales of service or goods.
@Brucanna Can you help me further explain step by step how do I allocate the third party in account receivable in custom control account? I’m lost.
Update: Never mind, I figured that one out.
Thanks for the advice. Now I know how to use the control account.