How to Add Credit Card Fee to Quickbooks Invoice
In today’s digital age, accepting credit card payments has become a necessity for businesses of all sizes. However, processing these payments often comes with fees that can eat into your profit margins. To ensure that you are properly accounting for these fees, it is important to add them to your Quickbooks invoices. Here’s how you can do it:
Step 1: Set up a “Credit Card Fee” expense account
In Quickbooks, go to the Chart of Accounts and create a new account called “Credit Card Fee” under the Expenses category.
Step 2: Add the fee to your invoice
Create a new invoice for your customer and enter the products or services they are purchasing. Then, add a new line item for the credit card fee. Enter the fee amount as a negative number to subtract it from the total.
Step 3: Assign the fee to the “Credit Card Fee” expense account
In the line item for the fee, click on the “Account” column and select the “Credit Card Fee” account you created in Step 1.
Step 4: Calculate the fee amount
To calculate the credit card fee, multiply the total invoice amount by the fee percentage charged by your payment processor. For example, if the fee is 3% and the invoice amount is $1,000, the fee would be $30.
Step 5: Show the fee separately on the invoice
To make it clear to your customer that you are passing on the credit card fee, consider adding a note or line item on the invoice that explains the extra charge.
FAQs:
1. Why should I add credit card fees to my Quickbooks invoices?
Adding credit card fees to your invoices helps you accurately track your expenses and profit margins, ensuring that you are not losing money due to processing fees.
2. Can I pass on credit card fees to my customers?
Yes, you can pass on credit card fees to your customers as long as you clearly disclose the fee and it is within the legal limits set by your payment processor and local regulations.
3. Can I add credit card fees to existing invoices?
Yes, you can edit existing invoices and add the credit card fees following the steps mentioned above.
4. Do I need to pay taxes on credit card fees?
Credit card fees are generally considered a deductible business expense, but it is always recommended to consult with a tax professional for specific advice.
5. Can I automate the process of adding credit card fees to Quickbooks invoices?
Yes, you can use third-party apps or integrations that automate the calculation and inclusion of credit card fees in your Quickbooks invoices.
6. Can I add credit card fees to online invoices?
Yes, you can add credit card fees to both printed and online invoices in Quickbooks.
7. What if I forget to add credit card fees to an invoice?
If you forget to add credit card fees to an invoice, you can create a separate invoice or credit memo to account for the fees and adjust your financial records accordingly.
