I want to ask, I have created an asset account called Bank, but why in the receipt payment - account, this option is not displayed, but other assets account are displayed, and even liabilities accounts are displayed also
Is it because I have selected bank in the Received in account? The balance sheet reports record this correctly, as the amount paid on this receipt is recorded in Bank. But I wonder why there’s a need for account field again?
And also, some customers are deducting bank transfer fee from their payment, it will be good if there’s a field called bank charges, and the amount entered there will be automatically classified on expense - bank charges. Or do we have to record this bank transfer fee expense manually?
No. It is because the Account field is the account in your Profit and Loss Statement to which the receipt is credited. You don’t credit a bank account when receiving money.
Because Manager is a double-entry accounting system. The Received in account gets the debit from the receipt, the other Account gets the credit.
No, it would not be good, because that would be incorrect accounting. The bank charges are with a different counterpart than the receipt, so they require a separate transactions. And why would a customer deduct a transfer fee from their payment? That is their cost, not yours. I suspect you are seeing the result of the bank deducting an incoming transfer fee from your proceeds, not an action by the customer.
No, it would not be good, because that would be incorrect accounting. The bank charges are with a different counterpart than the receipt, so they require a separate transactions. And why would a customer deduct a transfer fee from their payment? That is their cost, not yours. I suspect you are seeing the result of the bank deducting an incoming transfer fee from your proceeds, not an action by the customer.
Because there are some cheap customer that doesn’t want to pay for transfer fee, so they deduct it from their payment, so basically it become our cost. It is not the bank deducting incoming transfer, because there are some customers who paid in full, but there are customers who deduct transfer fee from their payment.
Maybe if it’s not on receipt, it can be put on payment, maybe will be better if there’s bank charge field on payment so we don’t have to manually create an expense for bank charge fee
You need to explain more about the origin of the transfer fee. Does the bank impose it? Do you enter it on a sales invoice? Why is this not just a case of underpayment?
So, if we making a transfer from one bank to another bank, there will be transfer fee…
Some customer doesn’t mind paying this transfer fee when they making payment, but there are many other customers that doesn’t want to pay this transfer fee, so the transfer fee become our cost.
For example,
Customer A buy product from us, the cost is 10.000, customer A pay by bank transfer from his bank account Bank A to our bank account on Bank B, Bank A’s transfer fee to our Bank is 25, since customer A will transfer from his bank to our bank, he will be charged 25 by Bank A.
Then, instead of transfering 10.000 to us, and pay 25 to his Bank, customer A will pay us (10.000 - 25) and pay 25 to his Bank. So Basically, his cost will still be 10.000, not 10.025.
So on our side, we only receive 9.975 instead of 10.000, and of course we cannot make it as underpayment, because on customer A’s side he has paid in full, but only he wants to burden us with the bank transfer cost. So, what we do is creating an expense manually for this bank transfer fee, but this can create problem because we have to track carefully every customer payment. (Because not every customer deduct the bank charge). There is possibility of creating too many or too little expense of bank charge
Some accounting program, has this bank charge fee on their payment menu, so we can enter the bank charge on the payment page, and the amount we enter on that field will be automatically classified as Expense - Bank Charge…this will lower the possibility of creating too many or too little expense and make us track the bank charge easily
You don’t have an accounting issue. You have a customer education and management issue. Who empowered your customers to arbitrarily deduct their business costs from the amounts they have agreed to pay you? And why do you tolerate that?
That’s how many companies here do that, especially big companies, the bigger they are the cheaper they are so how can we complain, customer is king right, all we can do is adjust our accounting system, we don’t want to lose customer just to argue for a meagre amount of bank charge…but on the side of accounting, every expense must be recorded right
Your latest questions cannot be answered until you answer my questions in post #5. Regardless of your deference to your abusive customers, Manager can record the transactions, but only after you understand who the parties are, what their relationships to one another are, and who is paying what to whom and why.
Does the bank impose it? Yes
Do you enter it on a sales invoice? No, my customer deduct it
Now, to answer your new question
Who the parties are? Bank A, Bank B, Me, Customer
What their relationship?
Me opened account on Bank A, Customer opened account on Bank B
Customer pay through Bank B to Bank A
Bank B charge a fee to my customer because it is a transfer to different Bank
My customer put this fee to me by deducting his payment, making the bank transfer fee to my expense
@iman think about your answer. Customer A paid you 9,975 and the tax man 0.025. So in your books the sales value is 9,975 not 10,000. You indicated to @Tut that you do not want to loose such customers and therefore you accept that they pay you 0.025 less for the product. There is nothing for you to record except a sales receipt of 9,975.
Okay, I know theoretically in accounting it’s like that, technically, my customer should bill me with an invoice of bank charge for that 0.025 then I pay to him that bank charge…
if I record 9,975 as his payment then the invoices status will always not paid in full, and the rest of the amount can be classified as unpaid invoices
but practically, instead of sending bill to us and we pay a meagre amount of money, they will just deduct us, and we will record it as expense, that’s why on the payment menu should be better if there is a bank charge field, like in some other accounting program i.e Zoho Books.
I’m just asking if Manager has any way to do this automatically instead of we create expense manually, but if not then it’s okay…this software is already good enough for our use
No practically it is like that, you just somehow do not want to see the fact that you sold the item to these customers for 9,975 which would also show in your bank account as being paid. Because you do not want to loose these customers because of getting less than the 10,000 you hope for then there is no practical nor legal way you can ever account yourself for bank charges that the customer would see in their accounts by their bank.
Indeed no legal way. You need to realize and accept that you sold the product for 9,975 as stated in your bank statement, that is it. It would be illegal to put 0.025 as an expense on your side, you never made that expense the customer did as a bank charge to them. You agreed to receive 9,975 and need to live with that or as @Tut explained in post 6 educate the customer and I agree with him on that.
I think this should not be considered as a bank charge expense in your case because this charge is supposed to be paid by your customer. So since you still suffer this charge I propose you treat it as a discount on your invoice, taking into considetation that bank transfer fees are usually fixed meaning you almost know prior to preparing an invoice how much you would charged for a transfer so that you indicate to your customer that the bank charge has been taken care of from your end lessed from the invoice value. State it cleary on the invoice for your customer to pick and know that the discount represents the bank charge. So when making a receipt you only receipt the correct amount transfered. You cant treat this as bank charge simply because bank charges only refering to charges generated by the bank you belong to and not a third party bank. You will never see this bank charge anywhere on your bank statement simply because its not your baby to nurse idealy.
Hi @Mule1 , this is a good idea…but there is a problem here, because the discount field in Manager is before VAT.
For example if I sell product at $1000, and the VAT is $100…the customer supposed to pay $1100, but instead he paid $1098 (let’s say bank charge is $2)
So if I put the $2 on the discount field, then it will affect the VAT amount also.
Because the VAT amount that I have to report is still $100, and the product sold that I report to tax is also still $1000, so the only way to reconcile this is to treat the $2 as my expense, or should I categorize it under expense : unpaid invoice?
so how can we complain, customer is king right, all we can do is adjust our accounting system, we don’t want to lose customer just to argue for a meagre amount of bank charge…but on the side of accounting, every expense must be recorded right