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%
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
