If you're one of the many business owners who uses credit card processing as a method of payment, then you’re more than familiar with transaction fees (also known as merchant fees). Most credit card processors will deduct these fees from the original payment made by your customer. You're then left with the net amount in your Wave account and a fee you need to account for.
How to account for transaction fees in Wave
You sent an invoice to your customer for $100 and they paid with PayPal. PayPal deducted $3 in merchant fees and sent you a deposit of $97. Since your bank account is connected to Wave, the transaction for $97 was imported automatically. You now have an outstanding invoice for $100. You need to mark that invoice as paid, and account for the merchant fee.
- Head over to Accounting > Transactions and locate the net deposit.
- Click the down arrow on the right of the transaction and select Split.
- Split the transaction into 2 parts: $100 and -$3 (notice there is a negative next to the $3 amount - this is to ensure that the total equals $97).
- Select the new $100 transaction and click the down arrow on the right, then Create Invoice Payment (if applicable, if not - see Step 5).
- If you do not have an invoice for this customer, simply categorize the $100 into the appropriate income account for your business.
- Categorize the $3 expense transaction into the Merchant Account Fees expense category.