How Does FlexBooks Handle Credit Card Funds?
FlexBooks handles credit card money in two steps, the same way it happens in real life: the sale, then the deposit.
Step 1: the sale
The day a client’s card is charged, FlexBooks creates a QuickBooks Sales Receipt for the full amount. That recognizes the income on your Profit and Loss and puts the money into a holding account on your Balance Sheet.
Which holding account depends on your setup, and that decides everything below. If your card money goes to Undeposited Funds, which QuickBooks sometimes labels Payments to Deposit, you are on the deposit-matching setup. If it goes to an account called Credit Card Processor, you are on a clearing account.
Not sure which one you are? Open your Chart of Accounts and look for Credit Card Processor. If it is there and it has a balance, that is the one you are using. Ask us if you are not sure and we will tell you.
If your card money goes to Undeposited Funds
When your processor releases the funds, FlexBooks creates a QuickBooks Deposit that moves the money out of Undeposited Funds and into your checking account.
Your bank feed brings in the same deposit a day or so later, and you Match the two. That tells QuickBooks they are one transaction and stops your income being counted twice. Never Post one of these while the row is in Categorize mode, because that records it as new income.
See How Do I Match My Deposits? and How Do I Match My Deposits?
If your card money goes to Credit Card Processor
FlexBooks does not create a deposit at all, so there is nothing in your register to match. The full amount of every sale sits in Credit Card Processor until the money arrives.
When the payout lands in your bank feed you record it as a transfer out of Credit Card Processor rather than as income. Your processing fees are the difference between the two, and a monthly fee entry brings the account back to zero.
See Clearing Accounts 101 and Fee Handling & Net vs. Gross Deposits.
Why there are two setups
Mindbody Payments takes its fees out before depositing, so the payout that reaches your bank is never the same number as your sales. A deposit and a bank feed line that are different amounts cannot be matched, which is what the clearing account is for.
Transfirst worked differently and deposited amounts that could be matched, which is why the deposit-matching setup exists and why many long-standing customers are still on it.
Which one should I be on?
If you process with Mindbody Payments, the clearing account. If your deposits never seem to match and you cannot work out why, that is usually the reason. Tell us and we will switch you over and clean up what is already there.