Adding Cash Receipts when a third party fee is taken.

There may come a time when you need to record receipts of cash when a third party takes a cut.

For example, Square Payment users often need to record transactions in this manner.

Lets say, we invoice our customers, we use square to collect payment from the customers, square then forward us this money (minus their fee).

The actual Customer paid the full amount to Square, so we need to record them as having paid the full amount rather than recording them as paying the full amount minus the Square fee.

How we do this, is firstly, we set up a Supplier account for 'Square'. We then record a Cash Receipt on the left side or 'Cash in' side of the Cash Book for the full amount the customer paid and we click Save (not Save/Lodge). This will keep the customers ledger correct and will show them having paid off the full amount.

Then after we lodged the one customer receipt on the left side or 'Cash in' side of the Cash Book.

We need to then make 2 payments on the right side or 'Cash Out' side of the Cash Book:

• A Non Ledger payment (no ledger account selected, as below) for the full amount invoiced (minus the square fee) and lodge that into the bank.

• A payment out to our Supplier (Square in this example) for the fee amount they charged.

Example:

Lets say that we Invoiced "Marty McBurger" for €100 and Square charged a fee of €5 for handling this transaction. we would reflect this in the Cash Book as shown below: