VT Cash Book

E.g., payment received for a sale of £100 with a fee deducted of £2.00 (£98.00 received in the bank):

1.Using the P+R function, enter an REC transaction with the following details:

2.In the first and second rows, enter/select the following:

1.Set up a dummy bank account for the payment processor:

Select Set Up > Accounts > Bank > New and enter the name of the payment processor. This acts as a suspense account for the fees, which is cleared when recording the payment processor's fees in step 3. If you have more than one payment processor, create an account for each one.

2.Enter each payment in the actual bank account:

E.g., payment received for a sale of £100.00 with a fee deducted of £2 (£98 received in the bank):

a)Using the P+R function, enter an REC transaction with the following details:

b)In the first and second rows, enter/select the following:

3.Record the payment processor's invoice for the fees

From your payment processor's statement, enter the fees as a PAY transaction, selecting the dummy bank account as the Bank account/Primary account.

The Analysis account should be an account in the Expenses ledger for the fees (e.g., Bank, credit card and other finance charges). If you are VAT registered, this account should be set as within the scope of VAT, even if the fees are exempt from VAT, since exempt purchases should be included in box 7 of the VAT return.

If you are VAT registered and the payment processor has charged VAT on part or all of the fees, enter the PAY transaction in the same way as above but enter the VAT in the VAT field.

Payment processor reconciliation

As this method uses a dummy bank account for the payment processor, you can use the bank reconciliation function should you want to reconcile the transactions in that account to a statement from your payment processor. This is done in the same way as shown in Bank reconciliation.