You are wasting time. If you are manually detailing each “transfer” or batch deposit from your credit card processor you are WASTING TIME. Unless you have less than five sales a month, you need to be using automation or clearing accounts. If you’re not sure what any of this means, keep reading…

How credit card payment processors work

A credit card processor (yes, even the one Intuit provides) works like a holding account. You invoice a client or charge them a fee and the processor takes the money. They hold on to the cash for a few days, take out their fees, and deposit the rest into your bank.

How the data shows up in QBO

When the processor deposits that amount into your bank account, you’ll see a deposit in your bank feed and/or on your bank statement. However, it’s not always easy to detail this data correctly. Instead of seeing how much your customer paid (example $100), you’ll see how much your customer paid minus any fees your processor took out (example $100 minus $3 of fees equaling a net bank deposit of $97). In addition to this issue, often your processor will batch multiple customer payments together so it’s more difficult to pull out each payment and match it up to the customer and add in all the detail you need to see.

How to make this process mistake-proof right now

This process is probably taking up tons of time, but you can make this so much easier if you start using a clearing account! Just follow these steps:

  1. Create a new “bank” type account in QBO and call it something like “Stripe Account” or “Credit Card Payment Account”
  2. Download a transaction report directly from your payment processor. This report should contain dates, full payment amounts, customer information, etc
  3. Format this data in a csv file and import this into QBO just like a bank file data into the new “bank” account you created in step 1.
  4. Match and add in sales detail to each deposit from this “bank” account
  5. For every batch deposit into your checking account, treat like a bank transfer from this new account
  6. Once all the transfers and deposits are recorded, enter an expense for all fees charged in that time period from your merchant provider (make sure to post this expense from your “bank” account and use an expense category such as “bank fees”)
  7. The last and most important step is to reconcile this account. Using a monthly statement provided by your payment processor, you can perform a full reconciliation in QBO. Navigate to the reconciliation page, select your “bank” account, and enter the ending statement date and balance. You can now go through each transaction make sure it matches your statement and complete the reconciliation.

Using these simple steps will make sure you are no longer making mistakes or struggling with net deposits. The first time you do this process will take a little longer, but after the first time you will be able to do this quickly and accurately with no trouble at all!


This post is intended to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Greenspace assumes no liability for actions taken in reliance upon the information contained herein.