Struggling with recording and reconciling transaction fees associated with customer payments in NetSuite? Wondering how to properly record the payment, close out your open receivables, capture the fee, and accurately reconcile with your bank account? Read on to learn how to leverage native functionality in NetSuite to make your transaction processing audit-ready.
A simple two-step process to recognize these impacts is to record the gross amount in a payment record, and then enter a journal to recognize the fee. While this accurately updates your books, it increases time-to-report and reduces traceability across transactions. At Plative, we encourage you to consider the following process.
This will work for both Customer Deposits and Customer Payments records, depending on your scenario. The key here is to book the Customer Deposit or Customer Payment to Undeposited Funds.
Consider the Following Scenario
An invoice of $100 is issued, and a payment is sent. The processor takes a $1.50 fee and deposits the net amount of $98.50 into your bank account.
Step 1a: For Customer Payments
Apply the gross amount ($100) to match and close out your open receivable.
GL Impact of Customer Payment:
- DR Undeposited Funds ($100)
- CR Accounts Receivable ($100)
Step 1b: For Customer Deposit
You may be accepting these funds prior to billing, and an invoice will not exist, so you’ll record it as a customer deposit. Just like the payment, record it under Undeposited Funds.
GL Impact of Customer Deposit:
- DR Undeposited Funds ($100)
- CR Customer Deposits Liability ($100)
Step 2: Deposit Funds
Then, create a bank deposit for this payment, which is currently in undeposited funds. Select the bank account and the transaction you created in step 1a or 1b. Next, add the fee by selecting the Other Deposits tab next to Payments.
Now, enter the account to post the fee. You can also add financial segmentation and associate it with an entity (Customer, Vendor, Employee). For the amount, enter a negative number to represent the fee incurred by the transaction. Continue adding fees if you would like to provide detailed breakdowns, rather than a lump sum fee.
GL Impact of the Deposit:
- DR Bank Account ($98.50)
- DR Account for Fee ($1.50)
- CR Undeposited Funds ($100)
Note that you will see NetSuite move the information to the ‘Cash Back’ tab. Alternatively, you can enter the fee under the ‘Cash Back’ tab, but it doesn’t allow you to associate it with an entity if needed. Additionally, under the ‘Cash Back’ tab, you don’t enter the fee as a negative number.
Give it a try, and if you’re stuck, don’t hesitate to contact one of our highly skilled NetSuite Consultants. If you’re just starting with payment processing in NetSuite, contact us about our NetSuite Stripe connector.