Transaction fees, recommended procedure?

Hello,

I have two questions about the proper way to account for transaction fees (outgoing payments and incoming payments).

  1. Paying for a purchase invoice
    When spending money on a purchase invoice, can I add another line to the payment form to allocate the transaction fee to the bank charges expense account? Previously I have made one payment transaction for the purchase invoice, and a separate payment transaction for the bank fee. I just tried adding another line to the payment form and was able to record the payment and bank charges in one payment which saves time. Is this recommended?

  2. Receiving money to PayPal and accounting for PayPal fee
    When receiving money for a sales invoice I have previously made one payment receipt for the funds, and a separate payment to the PayPal Fees expense account. Is it possible to instead add another line to the payment receipt form, and allocate a negative amount to the PayPal Fees expense account?

If the transactions for either the purchase invoice or the receiving money are separate transactions then they should be processed separately

The Purchase Invoice is payable to the supplier, the transaction fee is payable to the bank therefore it would be incorrect to add the bank fee to the suppliers payment. However, what you could do is add up all the transactions fees for the month and enter them as one transaction for the month.

The same would apply to PayPal, process one transaction for the month rather then individual ones…

Thank you for your reply @Brucanna

Since PayPal shows every transaction net (with their fee deducted) it would make bank reconciliation easier if we posted the fee along with the payment receipt as well. That way each transaction in Manager’s PayPal cash account would correspond with the actual transactions in the real PayPal account. We will never send a payment receipt slip from Manager to any customer since the e-commerce platform handles that already.

So… even though it is technically two transactions, for the sake of simplifying bookkeeping - would posting these two related transactions together on the payment receipt have a negative impact on the overall use of Manager and its reporting and accuracy? We update Manager daily so doing monthly postings of fees would be impractical and also difficult given the way PayPal presents every transaction.

No. because you only have a single transaction to process - the PayPal net.

Could you explain what you mean by I only have a single transaction to process in the form of the PayPal net? The customer invoice is greater than the PayPal net (amounting to the PayPal fee), so if posting the PayPal net as payment receipt the customer account would receive a credit.

Exactly what you said - Since PayPal shows every transaction net, (but it contains two components).

And as you said - add another line to the payment receipt form, and allocate a negative amount to the PayPal Fees expense account

Got it, thanks @Brucanna Just wanted to be sure I am not using Manager contrary to how its intended. :+1: