When customer makes payment to you via Bank TT, the Bank deducted a TT Charges from the payment. Thus, the physical amount received will be lesser than the invoiced amount.
How to record this TT Charges (Bank Service Charge expense account) into QuickBooks?
There are a few methods of recording this TT Charges.
You invoiced your customer $1,000.00
Customer make a payment of $1,000.00 via TT.
Bank deducted a TT Charge of $20.00
Amount deposited into the Bank is $980.00 ($1,000.00 – $20.00).
By Make a General Journal Entry method.
During Receive Payment from Customer, you can receive as $1,000.00. Then, created a General Journal to Debiting TT Charge expense account $20.00 and Crediting Bank account $20.00.
During your Bank Reconciliation you will see $1,000.00 in your Deposit page and $20.00 in your Payment page. You need to select both during your bank reconciliation.
By Write Cheque method.
This method is similar to Make General Journal method; the different is that you use a Write Cheque instead of recording a General Journal.
In the Write Cheque form, the payee will be the Bank (Supplier name), the account use will be the TT Charge expense account and the amount will be $20.00.
During Bank Reconciliation, like the above Make General Journal method, you are required to select both $1,000.00 from the Deposit page and $20.00 from the Payment page.
By Undeposited Fund method.
This method is a better method comparing to the above two methods. You receive payment from customer as $1,000.00 (full amount) into the Undeposited Fund account (for QuickBooks 2007/08 and above, you select ‘Group with other undeposited fund account’ radio button.
Then, select Make Deposit from Banking menu; you will see the amount received from customer ($1,000.00). Select this $1,000.00 received from the customer and click the Next button to continue with the next page.
In the following page, add an extra line item below this $1,000.00 received from customer. In the ‘Receive From’ field (optional), select Bank (Supplier name), and the ‘From Account’ field select TT Charges (expenses account) and enter ‘-$20.00’ in the amount field.
In this case, $980.00 ($1,000.00 – $20.00) will be debited into the Bank. In your Profit and Loss report, you should see a $20.00 in TT Charge expense account. Besides, in Bank Reconciliation you will only see $980.00 under the deposit page.