Overview

A common challenge that business owners experience is tracking credit card fees. This tutorial addresses some of the challenges as well as workarounds for tracking credit card fees.

Tracking Credit Cards

A credit card is a line of credit that has been granted to a specific company or business in order. When a customer's credit card is processed a credit card fee is deducted from the amount and the remaining balance is deposited in a merchant account. Some merchant account's are also bank accounts where you can withdraw money directly from that account. Other merchant accounts only allow you to transfer money from their merchant account to a different bank account from which you can then withdraw the money if you so desire. 

The challenge with tracking credit card revenue is the credit card fee. Below are some examples of how to track the credit card fees depending on how your bookkeeping is setup.

If you have a merchant account that is also a bank account then there is the possibility that your bank statement has the credit card fees already included on the bank statement. If this is the case then you would enter credit card fee along with the credit card revenue in your bookkeeping most likely using the split feature. Most accounts do not include the credit card fees in your bank statement although almost all of them provide a breakdown of your credit card fees over a specific time interval.

If you have a merchant account that is separate from your bank account, which is more common, then the situation gets more difficult. If you include the credit card fees in the bank account then it will show expenses that do not match up to the bank account balance since the credit card revenue that is deposited in the bank account has already had the credit card fees removed from it. There is not a good solution to this problem. As such we have provided the following solutions which may, or may not, meet your needs.

• Add in A Credit Card Fee Expense
• You could add the credit card fee back into the credit card revenue and then split the new revenue and add an expense for the credit card fee. This would correctly track the fees but your bank account bookkeeping entries would not match the credit card revenue and it wouldn't include the credit card fees.
• Import Credit Card Fees Directly From Merchant Account
• You could create a new account in StudioCloud and call it the merchant account. This account would include only the credit card revenue with the credit card fee added into it. You would then do a split on the credit card revenue and add an expense in the merchant account for the credit card fee. You would then transfer the remaining credit card revenue from the merchant account to the bank account. This would be accurate and it would match your bank account entries. However, it would be tedious.
• Ignore credit card fees and get the credit card fees report from your merchant account
• You could ignore the credit card fees in your bank account since your bank account already ignores them and then at the end of the year you can get the total credit card fees from your merchant account provider. Almost all merchant account providers provide a summary of their credit card fees.