2 part question re. Handling credit cards processed via a streamline terminal..
[1] I'm thinking of setting up a merchant account called StreamLine Merchant Acc. (possibly classed as a bank account) to keep track of everything. The process I'm thinking of following when a customer settles their invoice by credit card is...
CRedit the sales invoice as PAID by credit card and DEbit the StreamLine account with the same amount. When streamline pay the funds into the bank I can then CRedit the Streamline Merchant Account with the amount received to the bank.
This way allows for checking/confirming that the money has actually been received into the bank. I make sure all credit card transactions (no matter how small) are invoiced so I can track them.
Does this make sense and is this how others do it?
Another way I've thought of is to not use a merchant account at all, but to just leave invoices which are paid by c/card as unpaid until Streamline actually pay the funds into the bank account, only then at that point mark the invoice as paid and cross reference it against the bank receipt.
[2] Regarding the monthly invoice received from Streamline for their fees etc. An example of which is set out like this...
PDQ Terminal Rental: £14.95+vat (same amount every month) Transaction Charges: £5.08 zero rated (percentage based sales)
I am thinking of using 2 Direct Costs/Expense Accounts, "Equipment Rental" and "Card Processing Fees" so the above monthly invoice example would be broken into 2 lines/elements and entered as:
Equipment Rental: 14.95 - Standard Rate VAT
Card Processing Fees: 5.08 - Zero Rate
Is this correct?
Btw, what Sage nominal codes would be used for everything?
-- Edited by Wonnov Menny on Thursday 31st of May 2012 01:34:59 PM
I'm a bit of a slacker so all card transactions go straight to the bank account as lump sums for the day, and any charges be it for rental or transaction charges all go to the bank charge nominal with a description of what they are. Probably not the right way, and after reading your post I may change the way I do things :)
I'm a bit like Steve in that I post customer invoice payments paid by debit card straight as payments to the bank account.....oh, actually that's not strictly true...I use QB so I post them to undeposited funds individually and then when the lump sum deposit from Streamline goes into the bank I will deposit the individual transactions that make up that lump sum from undeposited funds to the bank account. So I suppose that if you use a Streamline merchant account in Sage that will be similar to how I work it in QB.
With regard to the invoice from Streamline I post this in exactly the way you have described.
What Sage nominal codes you use will depend on how you have it set up, but I would say obviously a bank account code for the merchant account....12xx somewhere and somewhere in the overheads 7xxx for equipment rental and somewhere in the 79xx region for the transaction charges.
I would post against invoice when money hits the bank using same reference for each transaction so you can easily pick up in the bank rec what makes up the credit on the statement. I would post all of the credit card charges invoice to 7903 or 7904 as "credit card fees". Why over complicate things ?
I think your on the right track......in using the credit card account or set up a streamline account as a bank account, you would receive money as you would in any other bank account (no need for journals) and then when the money hits the current account, it is a 'transfer' between accounts.
The transfers are dated (per the streamline transactions) so you should be able to keep on top of it.
As for the second part, again you are pretty much there. I would use (off the top of my head) 7700 for the rental element and 7901 for the card fees. Ok....7901 is 'Bank Charges' but by inputting the right detail (e.g., card transaction fees or similar) you can quickly and easily strip out and summarise these payments from the total bank charges account.
Thanks for the replies everyone, good to see that I'm on the right track.
@Count1314: Instead of posting to 7901 Bank Charges, what do you think about creating 7910 "C/Card Processing Fees"?
Also, re. the card account, do you think it makes more sense to set-up either 1225 or 1260 as "Streamline Merchant Account" rather than using the existing 1250 "Credit card receipts"?
I would personally use a separate code to bank charges as you suggested.
Also I would use a separate nominal to Credit card receipts just in case you ever need to use that. You can however change nominal codes around however you like, just as long as they are in the correct places for the accounts (i.e. Balance Sheet items to Balance Sheet codes and P & L items to P & L codes)
Of course you could create another account in the 79xx range for these charges. My suggestion was fine as they are effectively 'bank charges' but I would have sufficient detail on the transactions to quickly and easily summarise the 7901 account. By all means create another account.
As for the creit card receipts account question....if you feel you need this account (i.e., will you be accdepting credit card payments in a way other than via streamline machine).....then go for it in the appropriate range of bank accounts.
Wow, I've just read your thread and am confused but thinking I should be doing something similar. Unlike yourself all of my credit card transactions are not invoiced. It's a restaurant and I'm just in the process of setting up sage. Can't think how I'm going to reconcile the takings each day via amex or streamline with the payments that appear on the bank statement - particularly as - part of the payments will be inc VAT and part not - because tips don't attract vat.
If card transactions are not invoiced, I assume they're entered in the Till. There must be a written note kept on order pad showing the amount of the order per table. So there is a figure for the price of the meal upon which the tips are added.
Maybe you could either keep a separate record of the tip amount when entering card sales into the Till or even set up a "tips" button on the Till, so that card transactions are entered/broken down between cost of the meal and tips. Such as...
Meal : £100
Tips : £15
Total : £115
Then setup a new account in Sage for tips (outside the scope of VAT).
Then copy the info from the till roll (or the tips record) into Sage entering the card transactions into 2 accounts "c/card receipts" and "tips".
When you reconcile the payment received from the card company this should match up to the amounts entered in "c/card receipts" + "tips".
Just my thoughts... Although seek the advice of someone more experiened first before changing anything, as I could be talking complete hogwash and it's not unknown for me to be entirely wrong!
Hi I think you're thinking in the right direction and I can get this info from the till system. I do think I need to seek serious help on this cos if I get it wrong from the outset it could be a disaster. Thanks for your feedback Linda
