How Do I Account for MB Payments?
What is Mindbody Payments?
Mindbody Payments is Mindbody's own payment processing service which allows you to collect payments for your services sold through the Mindbody app, online store, or at your business. You can learn more about it at the Mindbody Payments FAQ.
What are Mindbody Payments' Payouts?
When the money collected from your customers is deposited to your bank account in a lump sum – this is called a Payout.
Why can't I just "Match" my Mindbody Payments Payouts with FlexBooks?
Each Mindbody Payment Payout deducts all associated processing fees and FlexBooks currently cannot account for these fees. In order to "Match" your deposit, each fee would need to be manually added to each deposit created by FlexBooks.
How does FlexBooks recommend I account for Mindbody Payments Payouts?
Don't worry, we've got a really easy way to account for the fees added to Mindbody Payments Payouts! FlexBooks recommends you handle Mindbody Payments Payouts by using a Clearing Account.
1. Request FlexBooks send credit card transactions to a Clearing Account
Just tell us that you'd like to use a clearing account and we'll reconfigure your FlexBooks account. FlexBooks will automatically create a Other Current Asset account called "Credit Card Processor" and send all credit card transactions there.
2. "Transfer" your Bank Feed Payouts to the Clearing Account
a. From your QBO Bank Feed, click on your MB Payments deposit
b. Select "Record as Transfer"
c. Select "Credit Card Processor" from the Transferred from* dropdown menu
d Select Add
Once, you're comfortable with this process, we recommend you create a rule to "Record as Transfer" all MindBody Payments deposits to the "Credit Card Processor" account automatically.
3. Use the "MB Payouts Report" and create a single monthly Expense to the Clearing Account for the month's fees
a. Using the MB Payouts Report, calculate the total amount of fees for the time period (NOTE: only the MB site owner account will be able to view and access this report)
- In MBO, click your name at the top right corner.
- Select Payments
- Choose Reports on the left side
- Select a start date and end date for your report.
- Click View
- Click Export
- Open the .csv file
- Add up all of numbers in the "Fees" column to calculate the total amount of fees for your selected time period
b. Create the Expense in QBO
- In QBO, click the "+ New" button
- Select Expense
- For Payee, select "MB Payments" (if it doesn't yet exist, create one)
- For Payment account, select "Credit Card Processor"
- For Category, select "MB Payments Fees" (if it doesn't yet exist, create one using Account Type: Expenses, Detail Type: Bank Charges)
- Enter the total amount of fees calculated above
What is a Clearing Account?
A clearing account is a temporary account used to hold money while it's being transferred from one place to another. It's perfect for accounting for MB Payments transactions because it handles the time between charging your customers' card and the day when the funds are deposited.
Here's an example of how a Clearing Account works:
1. You charge $120 in credit card funds, FlexBooks enters a Sales Receipt which increases the clearing account by $120 – BALANCE $120
2. MB Payments deposits $100 in your bank account (representing $120 minus $20 in fees)
3. QBO syncs in a $100 deposit through the bank feed
4. You transfer that deposit to the clearing account, which reduces the clearing account by $100 – BALANCE $20
5. You create an expense for $20 in fees, which reduces the clearing account by $20 – BALANCE $0
Here is an in-depth YouTube tutorial on Clearing Accounts and how they're used:
What is a clearing account and when and how would we use it?
How do I know if I'm using MB Payments?
In QBO, look at your deposits' Bank Details. If you see "ORIG CO NAME: MINDBODY, Inc." you use MB Payments as a payment processor. If you see "Tsys Transfirst", you do not use MB Payments as a payment processor – you use Transfirst.