How to Add Credit Card Processing Fees in QuickBooks

Posted on by rojerherrytip

Credit card processing fees are expenses that businesses incur when they accept credit card payments from their customers. These fees are typically charged by payment processors or merchant service providers for facilitating the transaction and processing the payment. In this article we will talk about how to Add Credit Card processing Fees in QuickBooks.

Step 1: Set up an Expense Account for Credit Card Processing Fees

To begin, you need to create an Expense account in QuickBooks specifically designated for credit card processing fees. This account will allow you to track and record these fees separately. Here’s how to set it up:

  1. Access the Chart of Accounts: Click on the Gear icon in the top right corner of the QuickBooks interface and select “Chart of Accounts.”
  2. Create a New Account: Click on the “New” button to create a new account within the Chart of Accounts.
  3. Select Account Type and Detail Type: Choose the Account Type as “Expense” and the Detail Type as “Other Miscellaneous Expense.” This categorization ensures that the fees are appropriately classified.
  4. Provide Account Details: Give a suitable name for the account, such as “Credit Card Processing Fees.” You can also add a description if necessary.
  5. Save the Account: Once you’ve filled in the account details, click “Save” to create the new Expense account.

Step 2: Create an Item for Credit Card Processing Fees

In this step, you will create an item within QuickBooks that represents the credit card processing fees. This item will be linked to the Expense account you created in Step 1. Here’s how to do it:

  1. Access the Item List: From the Lists menu in QuickBooks, select “Item List.”
  2. Create a New Item: Click on the “Item” button and choose “New” to create a new item.
  3. Select Item Type: Choose the appropriate Item Type based on your preference. You can select either “Service” or “Other Charge,” depending on how you want to categorize the fees.
  4. Fill in Item Details: Provide a name for the item, such as “Credit Card Processing Fees.” Under the Account drop-down menu, select the Expense account you created in Step 1. You can also enter a description for the item if desired.
  5. Save the Item: Once you’ve filled in the item details, click “Save” to create the new item.

Step 3: Apply Credit Card Processing Fees to Transactions

Now that you’ve set up the necessary accounts and items, you can apply credit card processing fees to your transactions in QuickBooks. Depending on the type of transaction, follow the appropriate steps outlined below:

a) Sales Transactions (e.g., invoices or sales receipts):

  1. Create the Transaction: Begin creating the sales transaction (e.g., invoice or sales receipt) as you normally would.
  2. Add Product/Service Items: Include the items representing the products or services sold in the transaction.
  3. Add the Credit Card Processing Fee Item: Insert a line item for the credit card processing fees using the item you created in Step 2.
  4. Enter the Fee Amount: Input the appropriate amount for the fees incurred during the transaction.
  5. Save the Transaction: Once you’ve completed the necessary entries, save the transaction to record it in QuickBooks.

b) Expense Transactions (e.g., checks or expense forms):

  1. Create the Transaction: Begin creating the expense transaction (e.g., check or expense form) as you normally would.
  2. Fill in Expense Details: Enter the relevant details for the expense, such as payee, date, and amount.
  3. Add the Credit Card Processing Fee Item: Insert a line item for the credit card processing fees using the item you created in Step 2.
  4. Enter the Fee Amount: Input the appropriate amount for the fees incurred.
  5. Save the Transaction: Once you’ve completed the necessary entries, save the transaction to record it in QuickBooks.

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