Fee Handling & Net vs. Gross Deposits
Overview
Processing fees are one of the most confusing parts of reconciling Mindbody and QuickBooks. This guide explains the difference between gross and net deposits, how FlexBooks records each, and exactly what you need to do each month so your books balance.
TL;DR: FlexBooks records the full sale amount when it happens. Your bank receives the net deposit (sale minus fees). You transfer the net amount from your clearing account to the bank, then record fees as a monthly expense to bring the clearing account back to zero.
Gross vs. net deposits
| Term | Meaning | Example |
|---|---|---|
| Gross sale | Full amount the client paid | $100 class purchase |
| Processing fee | Amount retained by the payment processor | $3 fee |
| Net deposit | Amount that hits your bank account | $97 |
FlexBooks always records the gross sale at the time of the transaction. The gap between gross sales and net bank deposits is your processing fees.
Two payment processor paths
Transfirst (legacy Mindbody card processing)
Bank feed deposits often show as TSYS/TRANSFIRST or Tsys Transfirst Bkcd. FlexBooks creates expected deposits in your checking register; you Match bank feed deposits to those expected deposits. Fees are typically handled separately via monthly MBO fee reporting.
See: How Do I Match My Deposits?
Mindbody Payments (powered by Stripe)
Bank feed deposits show as MINDBODY, Inc. Deposits arrive net of fees. FlexBooks uses a clearing account to hold gross sales until you transfer the net deposit and record fees.
See: Clearing Accounts 101 and Using FlexBooks with Mindbody Payments
How FlexBooks records credit card sales (all processors)
- Day of sale: FlexBooks creates a Sales Receipt for the gross amount. Income is recognized; funds go to Undeposited Funds or a clearing account.
- Deposit day: FlexBooks creates an expected deposit (Transfirst) or you transfer from the clearing account (Mindbody Payments).
- Bank feed day: You Match or Record as Transfer so QuickBooks does not count income twice.
- End of month: You record processing fees as an expense (Mindbody Payments) or per the MBO fee report (Transfirst).
See How Does FlexBooks Handle Credit Card Funds? for the full walkthrough.
Monthly fee workflow (Mindbody Payments)
Follow these steps during the first week of each month for the prior month’s fees:
Step 1: Download the Mindbody Payouts Report
- In Mindbody, click your name (top right) > Payments.
- Click Reports on the left.
- Select the date range for the prior month.
- Click View, then Export to download the CSV.
Step 2: Calculate total fees
- Open the CSV. Ensure all values in the Fees column are negative (convert positive “Mindbody App | Transfer” rows if needed).
- Sum the Fees column for the month using the Initiated Deposit Date column to filter.
Detailed steps: How to Calculate your monthly MB Payments Fees
Step 3: Record the expense in QuickBooks
- In QBO, click + New > Expense.
- Payee: MBO Fees (create if needed).
- Payment account: Credit Card Processor (your clearing account).
- Category: MBO Fees (Expense > Bank Charges).
- Amount: Total fees from Step 2.
- Date: Last day of the month being reconciled.
After this entry, your clearing account balance should return to $0.
Visual flow: Mindbody Payments month
Monday: $500 in sales → Clearing Account +$500 Wednesday: $485 net deposit in bank → Transfer $485 Clearing → Bank Month-end: $15 fees expense → Clearing Account -$15 → Balance $0 Result: P&L shows $500 income, $15 expense, Bank shows $485 deposited
FAQs
Does FlexBooks automatically record my processing fees?
No. FlexBooks records gross sales and net deposits. You record processing fees as a monthly expense using the Mindbody Payouts Report. This keeps your fee totals accurate and matches what Mindbody actually charged.
Why is my clearing account not zero?
- You have not yet recorded this month’s fee expense.
- A bank deposit was Added instead of Transferred from the clearing account.
- A deposit is unmatched. See Troubleshooting Missing, Duplicate, or Unmatched Transactions.
My bank deposit does not match the clearing account balance
This is expected mid-month. The clearing account holds cumulative gross sales minus transfers and fees. Only expect a $0 balance after you have transferred all deposits and recorded monthly fees.
Transfirst deposits: do I use a clearing account?
Transfirst users typically match deposits directly rather than using the clearing-account transfer method. If you have migrated from Transfirst to Mindbody Payments, your setup may change — contact support if you see both deposit types in your bank feed.
Can I automate fee entries?
QuickBooks rules can help categorize recurring fee expenses, but the fee amount changes monthly. We recommend calculating from the Payouts Report each month rather than using a fixed-amount recurring transaction.
Common mistakes
- Adding bank deposits instead of Matching or Transferring — doubles income. See How to Correctly Match Bank Deposits in Your Bank Feed.
- Recording fees from the bank feed instead of the Payouts Report — amounts may not tie to Mindbody’s fee breakdown.
- Skipping month-end fee expense — leaves a balance in the clearing account.