How to Add Credit Card Fee to Invoice in Quickbooks

How to Add Credit Card Fee to Invoice in Quickbooks

As a business owner, it is essential to understand how to properly account for credit card fees in your invoices. Fortunately, QuickBooks offers a straightforward process to add these fees and ensure accurate financial records. Here’s a step-by-step guide on how to add credit card fees to invoices in QuickBooks:

Step 1: Set up a service item for credit card fees
Before you can add credit card fees to your invoices, you need to create a service item in QuickBooks. To do this, go to the Lists menu, select Item List, and click on the Item drop-down menu. Choose New, and then select Service. Name the item “Credit Card Fee” and assign it a suitable account to track the fees.

Step 2: Apply the credit card fee to an invoice
Once you have set up the service item, you can apply it to your invoices. Open the invoice you want to add the credit card fee to and click on the Add Time/Costs button. Select the Credit Card Fee item and enter the amount as a positive number. QuickBooks will automatically add it to the invoice total.

Step 3: Record the credit card fee payment
When you receive payment from the customer, including the credit card fee, record it as you usually would in QuickBooks. Make sure to select the appropriate income account for the fee. This will ensure accurate tracking of your revenue and expenses.

Step 4: Reconcile your credit card fees
During your bank reconciliation process, make sure to reconcile your credit card fees separately from your regular income. This will help you accurately track your fees and ensure your financial records are up to date.

See also  When Does Elan Financial Report to Credit Bureaus

FAQs about Adding Credit Card Fees to Invoices in QuickBooks

1. Are credit card fees deductible as a business expense?
Yes, credit card fees are considered a business expense and can be deducted on your taxes.

2. Can I add credit card fees to invoices in QuickBooks Online?
Yes, the process outlined above applies to both QuickBooks Desktop and QuickBooks Online.

3. Can I customize the credit card fee item name in QuickBooks?
Yes, you can customize the name of the credit card fee item to fit your business preferences.

4. How often should I reconcile my credit card fees in QuickBooks?
It is recommended to reconcile your credit card fees at the same frequency as your regular bank reconciliations, typically monthly.

5. Can I apply credit card fees to past invoices?
Yes, you can add credit card fees to past invoices by editing the invoice and following the steps outlined above.

6. Can I charge different credit card fees for different customers?
Yes, you can set up different service items for credit card fees and apply them based on the customers’ preferences.

7. Are credit card fees subject to sales tax?
Credit card fees are generally not subject to sales tax as they are considered a separate charge for processing payments.

By following these steps and understanding the FAQs, you can easily add credit card fees to your invoices in QuickBooks. This ensures accurate financial records and helps you track your business expenses effectively.