You have made a sale for £50 and that should be recognised in the accounts as a sale for £50.
You have a transaction charge of £1.20 which is the equivalent of a bank service charge.
The service charge does not relate to the item being sold. It is a finance charge that was not necessarily incurred in the sale. i.e. you could have sold the item fo cash and received £50.
Your confusion is happening because the transaction is offset before you get your money but the reality of the transaction is that two transactions have taken place. One a sale for £50 and one an expense for £1.20. To state it any other way is understating turnover.
From VT's perspective there would be a three way reconcilliation between the sale, the expense and the bank
hope that makes sene,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
You've just reminded me I now have a few of these to do when I do my client's 21/22 accounts. They are daily sales in a cafe so the treatment will be different. (sumup rather than go cardless)
Personally I would have left the bank transaction as it is - coded to customer, and done a journal CR customer DR bank charges.* It has the same affect though so your way works.
*Just seen your EDIT and that's the way you had it first.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Go Cardless is a 'bank' account. As is Barclaycard/Sum up/Stripe/ Worldpay/other card providers. Set up as such in bookkeeping software. Upload and process customer invoices from the GoCradless bank if they are paid by card. Process charges to GO Cardless bank, care re VAT on charges now (see invoices). Entry on your Bank is actually the transfer from GoC to main bank that you see on the Bank statement, which happens a few days after the customer has actually paid, so more accurate way of recording. Reconcile both.
Not for cafe. You miss out the customer invoice element obvs
Thank you for the further answers. Setting up the GoCardless bank account sounds like a good plan.
At the moment I am just going to be doing simplified Self-Assessments with my business but good to have everything in place correctly should I get bigger down the line.
