There are a few methods of taking payment electronially these days and normally every sales item has an associated 'Fee' which I had been in the habit of booking as bank charges. When it comes to PayPal, there is a neat summary page for the month that totals these fees as well as totalling sales and providing a month end balance. As these fees can really build up to something pretty significant over the year, is it correct to book them as bank charges....or perhaps some kind of cost of sale?? They make the bank charges account a bit wild in comparison what you would normally expect to see in this account!
I book them as I do partly because I treat the PayPal account as a separate bank account (as it has closing monthly balances) and 'bank transfer' into the business account when the transfers hit the business account.
For businesses that do all of their trading through such accounts, these charges would surely need to be factored in to their margin calculations/forecast rather than shown as bank charges......Any thoughts?
I agree, this is definitely a cost of sale rather than a bank charge so needs to be coded as such. However, I have a situation where a small monthly fee is also paid to Paypal and because this is the same every month regardless of the level of sales, I post it as a type of bank/credit charge.
