Digital bookkeeping advice

[OhSimon]

Hi all,

I'm after advice from anyone who reconciles their books using xero, quickbooks etc. and also receives income via a payment provider - in this case stripe.

I run a VAT registered business and have just started recieving some payments via stripe links. The payment provider then pays out a monthly sum of payments recieved with their fee deducted. All my transactions in my bookkeeping software have to be reconciled - one reason being to accurately calculate my VAT returns.

My question is - how do I handle these stripe payments? The VAT owed is based on the actual invoices not the stripe payments as these wouldn't sum to the same value. How can I accurately log my VAT liability in this scenario?

 

[johndon68]

You pay the invoices in full and then post a separate transaction for the fees.

So, for example, you have an invoice for £100+VAT and Stripe charge you £5. You post a receipt of £120 against the invoice and then post the £5 as a separate bank payment to an expenses code for 'Card Fees' or 'Bank Charges'.

I've ignored any VAT that may be on the Stripe charge, if there is VAT then you post the payment with the VAT added on.

If you want to keep all the Stripe transactions separate, create a dummy Stripe bank account and post the receipt and the payment to that bank account. The amount left is the amount you actually receive and you can then transfer that to your actual bank account.

 

[OhSimon]

Hi John,

Sorry but I'm not quite following you - when you say 'pay the invoices', are you referring to the stripe invoices?

I have my bank synced with quickbooks so im not sure what you mean by 'post a transaction'. My list of transactions are mirror of my bank account.

 

[johndon68]

Sorry, when you said invoices I assumed that you meant customer invoices.

You post the sale for the full amount, i.e. £100+VAT
You post the Stripe fee as separate transaction (typically a 'bank payment' in most accounts software)

The difference between the two is the amount that you receive from Stripe which matches what goes in to your bank account.

John

 

[OhSimon]

Sorry but I still dont understand what you mean - I don't know what you mean by 'post'.

My transaction list is literally pulled from my bank and have to be reconciled. These cannot be changed

 

[johndon68]

'post' would be entering a transaction.

So, at the moment, the amount that you actually receive from Stripe is automatically paid in to your bank and then your accounting software automatically downloads them in to the bank account in the software?

Is there VAT on the Stripe transaction fees?

 

[OhSimon]

Yeh so that's the thing, I don't enter my transactions manually. The business bank account has a live link with quickbooks. All the transactions are automatically listed in quickbooks - most are auto-matched based on rules. The rest have to be manually reconciled to tell the software what they are.

Yes, stripe pays into the bank account automatically. Reverse charge VAT will apply to the stripe fees as they are based in ireland but that will be dealt with separately.

 

[Alan]

You need to have a separate bank account called Stripe.

All you customer invoices are settled in full by the Stripe 'bank' account ) My accounting system ( and I guess Quickbooks if set up correctly ) get an automated feed from Stripe.

Then your current account has a transfer from the Stripe account less fees.

 

[Philip Hoyle]

As said above, create a new bank account in QB called "Stripe". Then set up a rule in QB so that monies paid into your current account from Stripe are auto-entered/explained as a transfer from QB Stripe bank account to QB current account. That sorts out your current account in QB. Then you "pay" sales invoices paid by Stripe as fully paid by the Stripe bank account in QB. So that "clears" the customer invoices as being fully paid. You then have a difference in the QB Stripe bank account being their charges. To reconcile the QB stripe bank account, you need to enter their charges as a payment explained as being bank charges - you can do that daily or monthly, whatever's best for you.

 

[Newchodge]

Can I suggest you either sit down with your accountant and get them to explain how book-keeping works, or pay someone to do it for your first year, so you can see how it is done. It is a lot more than downloading and reconciling the bank statement.

 

[Paul Carmen]

Accounting wise, it's as described by Philip above, but it needn't be very difficult if its all integrated properly.

The setup as you've got it makes no sense, unless this is an online ecommerce (website transaction). Effectively, it sounds like you're missing out integrating the payment provider with the accounting package, by sending links straight from Stripe.

Stripe is designed to integrate with accounting packages. As an example, we use it as one of our payment options on Xero invoices. If the customer chooses to pay with Stripe, then the fees are deducted and dealt with properly accounting wise; e.g. payment of the invoice/VAT/Stripe fees etc are automatically reconciled in Xero.

 

[Bob Morgan]

THERE IS NO CLOUD! - You just use someone else's computer!

 

[twobic]

Hi all,

I'm after advice from anyone who reconciles their books using xero, quickbooks etc. and also receives income via a payment provider - in this case stripe.

I run a VAT registered business and have just started recieving some payments via stripe links. The payment provider then pays out a monthly sum of payments recieved with their fee deducted. All my transactions in my bookkeeping software have to be reconciled - one reason being to accurately calculate my VAT returns.

My question is - how do I handle these stripe payments? The VAT owed is based on the actual invoices not the stripe payments as these wouldn't sum to the same value. How can I accurately log my VAT liability in this scenario?

I run an ecommerce biz with 10-15 accounts just like the one you describe. here is what you do:

Set up Stripe as a A/R (accounts receivable) asset account. Steps upon making a domestic sale of £120 via Stripe:

1. DR Stripe A/R £120; CR revenue £120
2. DR revenue £20; CR VAT control £20

You can deduct the Stripe fees either just prior to the time of them paying into your bank, on a schedule or for each sale, as so (example £10):

1. DR expense (payment-processing fees) £10; CR Stripe A/R £10

then when you receive the payout (of the remaining £110)

1. DR payout account £110; CR Stripe A/R £110

then when you file your VAT return:

1. DR VAT control £20; CR VAT suspense £20

then when you pay your VAT bill:

1. DR VAT suspense £20; CR cash at bank £20

rinse and repeat

 

[MyAccountantOnline]

You need to have a separate bank account called Stripe.

All you customer invoices are settled in full by the Stripe 'bank' account ) My accounting system ( and I guess Quickbooks if set up correctly ) get an automated feed from Stripe.

Then your current account has a transfer from the Stripe account less fees.

Exactly how I do it if I undertake a clients bookkeeping and what I recommend too.

 

[NFSH_79]

Evening all,

Forgive me as I may jump in on many a topic or resurrect and old post as I find my way! But this forum does seem to be full of info on Quickbooks as well as much more

However......the above post......and forgive as this may seem obvious but clarity is key

I have similar in that I use SumUp (occasionally) so following advice created a SumUp Bank Account and raised relevant transaction for the full payment/purchase amount. I have transferred monies received from SumUp to Current Account and 'Matched' (i.e actual received amount from SumUp) leaving the fee in the SumUp Bank Acc.

The fee - I take it I raise an 'Expense' for this as Bank Charges? Do I simply create a Supplier called Sumup for this expense? or have I totally missed the mark?!?

Cheers Nick

p.s. Using QBO Essentials

 

[Scalloway]

I take it I raise an 'Expense' for this as Bank Charges? Do I simply create a Supplier called Sumup for this expense?

Yes