I don’t understand how to deal with this:
The product has a normal price 380.
The customer pays 440 on their credit card (the extra fee is to allow monthly installments).
The credit-card company keeps 80.
Our company receives 360.
So I suppose the customer needs to receive an invoice for 440. But beyond that I’m confused about how to enter the payment and record the fee difference so that the record doesn’t show a deposit of 440 into our bank account, which would be wrong.
I am assuming that 20/- is the charges taken by CC company for the transaction which would be around 5% and the other 40 would be for the interest for the monthly installment.
I think you should make an invoice as below:
- Item A (Qty=1) (Price=380) (Cr Sales)
- Installment (Qty= 4) (Price = 15) (Total = 60) (Cr Installment)
Installment or Interest would not be your income but an expense that you are bearing on behalf of the customer, since its the customer who option for monthly installment and the charge is being borne by your organisation
And when you receive a payment of 360, you can make a entry like this:
Cr Customer = 440/-
Dr Bank = 360/- (since you received only 360/-)
Dr Installment Charges = 60/-
Dr Transaction Charges = 20/-
This ways your accounts would remain clean and you can easily track your accounts.