Mar 18, 2013 - Credit cards are a commonly misused function in QuickBooks that I'll. The subsequent payment on these charges, and recording any other. From the Top Icon Bar, click Customer > Enter Sales Receipts. From the Customer: Job menu, add or select a customer or job. Enter the Item, Description, Quantity, Rate, and Amount. From the Payment Method icons, select the payment type and enter the customer's credit card information.
(Consultant/CFO, Randal Shields, CPA) Apr 28, 2010 I've never previously heard of a company classifying credit card fees directly against revenue. Here are a few thoughts pro/con. Pro: Would want to see this on a seperate GL account or P&L Line item, treated as a sales discount/allowance. The argument here might be valid if you are following some cash method of accounting for revenues. The Sales Discount/Allowance approach would seem to be the only potential argument. However, would expect SD&A's to be related to customer volumes, special deals, promotional pricing, sales price adjustments to resolve an issue with a customer to collect payment (in lieu of becoming a bad debt).
Cons: My experience in a variety of industries has been for this to be a G&A line item expense. Canon print business app for mac. It is variable in nature, driven by revenue and payment type mix. Have even gone as far to isolate on the GL account level each credit card type for the merchant processing fees, i.e. MV/Visa, AMEX, Discover, etc. I consider credit card fees to be similarly related to collection fees/costs.
In accepting credit cards, the business has decided to absorb these processing costs as a convenience to the customer, and as a way to turn sales into cash quickly vs. Doing some direct AR billing, which can put at risk ever collecting the revenue from the sales, leading to another G&A line item costs for Collection Expenses and Bad Debts. When/if you reserve for and/or write-off bad debts, where is this being classified. In following your company's accounting treatment vs. Revenue for credit card fees, to be consistent, would expect bad debt accounting processes to hit revenue classification, which I think is a mistake. Bad Debts - Once the goods or services have been delivered, you have a valid sale. This issue is collection of cash.
The only instance to reduce revenue I've done is where the Sales Dept has decided to adjust prices or invoice amount to settle a dispute (quality, quantity, continuing relationship, etc.) But if Sales is not willing to do this, stands by the validity of the sale, revenue should not be impacted, the write-off cost goes to a SG&A expense classification. Since the credit card fees intent partially at least is to avoid this, why would this be a revenue reduction?
Also, ask the question - whenever you get a Credit Card charge back that the company 'eats', how is this transaction recorded? Under what your company does to reduce revenue for the credit card fees, do they 'unwind' the revenue, or classify this as a write-off. If hitting revenue, the COGS still exists. Next would be accounting for and reconciling Sales Tax Liability.