Short payments due to clients bank fees

I am struggling with a small niggling issue and how to manage it in the Manager software

I invoice a customer say $1000
They send a remittance for $1000
But actual received in bank is say $990 (i.e. $10 short)

I believe the $10 short to be due to bank transaction fees from client end (which I shouldn’t have to pay, but as the margins are good and customer is good, I will accept the minor shortfall whilst asking their accounts to improve this)

This can occur in cases where the client pays 2 or more invoices collectively, and there is a transaction fee shortfall.

Now I’m faced with the problem of how to properly get rid of the $10 outstanding in Manager?

Reducing the invoice is one way to manage this but may be problematic with GST amounts and other documents generated during an audit (Quote/SO/client PO/SI, etc will all have the original $1000 value).

Is there a way to just show the bank fee as a debit transaction somewhere?

This is an example of a short payment due to some bank fees

Over time I get an accumulation of these, but I need to clean this up without going back and harassing the client

in your receipt post the full invoice amount against Accounts receivable and add a separate line for the Bank Charges by entering $10 as a negative value.


This sounds good, makes sense, but can you give a little more detailed guidance how to get to this entry point.

Baby steps for a 55yo operations (non-accountant) to follow

please read the guide Record a receipt | Manager

And you lost me … :frowning:

that guide talks to similar different issues and confused me, sorry, that’s just me being old

If I open the invoice in example above, select “New Receipt”, I get this screen … is this right, then what next?

@sharpdrivetek already illustrated the technique.

Thanks Tut for once again mastering the technique of helping by not helping at all and simultaneously making a person feel like an idiot for asking.

If I clearly understood the help being provided, I wouldn’t have continue to ask for more assistance.

FYI, I did ask this directly to Lubos and he suggested I post this in the forum as the question does come up often and may need a specific guide, hence my post.

you just click the Add line button below the Account column to add any number of additional lines. then select the Bank Charges account and proceed with my above instructions.

Thanks @sharpdrivetek does this look right?

the Accounts receivable amount should be the invoice amount unless you are making a new receipt to clear the unpaid amounts alone.
my suggestion would be to edit the original receipts so that your accounts will match the bank statement. but then you have to see the legal aspect of this too. if you have already filed the details with your tax authorities, you should not be making a receipt but a journal entry instead.

This is a big part of why I was asking.

Obviously the invoice will retain the original amounts to match for future audits, so I don’t want to change that.
The client thinks they paid in full and have a matching remittance, and I’m good with that.
But the bank shows the shortfall (neither my bank or client can account for this but it’s relatively minor in the grand scheme)

So the trick will be to somehow remove the shortfall as a bank fee but not upset the bank statement and throw it out of balance thinking I’ve actually paid some money out for the bank fee

i assume the balance in your Manager bank account tallies with your banker since you had entered the initial receipts matching the amount received in your bank. the only mismatch would be the customer statement where you still show outstanding dues but your customer shows paid in full.

now, you can make a single journal entry for all the invoices like below.

Make a new journal entry transaction posting old losses / short fall to a current good will or marketing expense account. See Write off bad debts

For new sales include an extra line item in the “Receipt” transaction as initially described above (or request the customer pay you the full amount, not minus their banks changes)

Using this actual example :

The Quote, Sales Order, Client PO, Sales Invoice and Clients Remittance all show $3,094.30
The bank statement and the receipt of payment in manager show the actual amount received of $3,078.30
This leaves the $16 difference hanging

At this point the bank reconciles beautifully, however leave this outstanding amount in the system

I’m happy to name it a bank fee (which is what it is), but receipt it in such a way as not to throw the bank reconciliation out of whack

So objectives are:
Remove the outstanding amount
Don’t create a bank transaction to throw the bank balance out

the journal entry method described in my last reply will suit your current situation. it is better to make a journal entry for this correction because if you make a receipt, this particular entry will not show in your actual bank statement even if it reconciles perfectly.

for the future, when you receive a payment you can simply enter the receipt as suggested in the initial reply.

I’m thanking you for the assistance, but admit I’m only 50/50 with what to do

The bad debt linking covers the tax implications

mistakes and corrections are common in a business. it would be better to show a correction as a correction rather than alternatives. a journal is a correction.
discuss both methods with your accountant/ auditor. they can help with the decision.

There is also the scenario where multiple invoices are paid with one transaction by client, and also has this bank transaction happening, I’ve got this issue as well as on single invoice payments

understanding the situation of @Elfroar, there are no tax implications in this particular transaction and neither is it a bad debt. it is just an expense incurred when receiving payments and he is willing to bear with it.