Entering a sale that has charges/commissions deducted from payments.

adimauro

I was wondering if I can help on how I record this transaction. I have been doing it incorrectly and I have been told to entry the transaction via journals.

We have a third party that looks after our online orders. On a daily basis we get the funds less any charges/commissions. What is the correct way of recording the GST and expense. I have been told a journal entry is easiest. This would be daily transaction.

Thank you.

Acctd4

The best method is using a Clearing account - This is a dummy "Bank" account that you put the transactions through to account for both sides.

As it's a bank account, you can receive payments "in" to it as well as also record payments paid "out" of it.

• You would use a Sales Receipt to record the full amount of a sale (including any GST component) with it depositing to this Clearing Bank account.
• You then create a Write Chq(s) from this clearing bank account for the applicable charge(s) / commissions etc leaving the net balance (which should match the final amount you actually receive)
• You can then use Transfer Funds or Write Cheque to move these funds from the clearing account to your actual bank account. (I prefer Write Chq as it allows for more detail)

This process correctly accounts for all:

• Income
• Expenses &
• GST

It also allows matching transactions in the bank account for reconciling 😊

adimauro

Thank you so much for responding to me. Shaz.

Acctd4

You're very welcome @adimauro - Feel free to contact me direct if you get stuck 😊