MaxQ Charge It! – Credit Card Accounting Demystified

Credit Card Accounting Demystified

MaxQ Charge It! for Dynamics SL

Scenario:

  • Invoice for $100 processed for Customer ABC using a Credit Card
  • Credit Card Fee of 3%

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charge-it

Step 1: Invoice to Customer ABC processed  – $100 balance in AR for Customer ABC

Debit                      Credit
A/R $100              Sales $100

Step 2: Batch Close – Customer Credit Memo
– Credit Memo ($100) created for Customer ABC leaving $0 balance on their account
– Credit Card Fees ($3) captured & booked to the expense account defined in Charge It! Setup
– Clearing Account is defined in Charge It! Setup

Debit                       Credit
Clearing $97           A/R $100
Fees $3

Step 3: Batch Close – Invoice to Credit Card Company
– Invoice ($97) created for Credit Card Customer defined in  Charge It! Setup
– $97 AR balance for Credit Card Customer

Debit                      Credit
A/R $97                 Clearing $97

Step 4: Payment from Credit Card Company

Debit                      Credit
Cash $97               A/R $97

– Payment ($97) for Credit Card Customer  created & applied

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