In this article:
Overview
Before You Start
Set up an expense account in QuickBooks
View LMN Payout Report
Reconciling Bank Deposit in QBO
Profit & Loss Reporting
How to Record Net Fees by Customer
Recouping Costs in LMN Budget
Overview
When customers pay you through LMN Pay Powered by Stripe, Stripe deducts its transaction fees from each payout before sending it to your bank. That means your deposit is always a little less than the payments your customers made. This article shows you an easy way to record those net fees in QuickBooks Online after your LMN Pay Powered by Stripe deposit arrives, so your books and your bank statement match. This recommended path is for reconciling net fees per deposit total, not per individual customer(s).
Before You Start
Make sure your LMN invoices and payments are synced from LMN to QuickBooks Online. Your invoices should show as paid, with the payments sitting in a deposit account called Undeposited Funds (or Payments to Deposit).
Set up an expense account in QuickBooks
If you do not have an expense account dedicated to recording transaction fees set up in QuickBooks already, you are going to want to create one so you can easily track how much you’ve paid at the end of the year on your P&L. Already have an expense account for tracking transaction fees? Use that one and skip ahead to the next section.
In QBO, click the Settings gear on the top right, then click on Chart of accounts
To create a new expense account, click New Account
Under Account Name, type in "Stripe Transaction Fees". Set the Account type as Expenses. Click Save and close.
Your expense account is now set up successfully in QuickBooks Online
View LMN Payout Report and Record the Fee
When syncing invoices and payments to QuickBooks, it is important that all payments are synced to the Default Deposit Account called Undeposited Funds (or Payments to Deposit). If you are unsure of your current setup in the LMN Sync Tool, go to LMN > QuickBooks > QB Online
Once the LMN Sync Tool is open, click on Payments→ Settings and confirm the account under the filter Default Deposit Account.
Undeposited Funds is a holding account in QuickBooks for payments that have been received but not yet deposited in your bank account. When your LMN Pay Powered by Stripe deposit arrives, you will move the payments included in that deposit from
Undeposited Funds to your bank account, using the date the deposit hit your bank. This is also where you'll record the net transaction fees (covered in the steps below).
Reading the Payout Report in LMN
In LMN, go to Payments, then click on the Payout tab to view a list of all your recent deposits.
Next, click into the most recent payout to start the reconciliation process in QuickBooks. Your Payout report with Stripe will have a column to show the Gross total of all payments received, Fees deducted, and the Net amount deposited in the Payout. Note the Fees total, since you’ll enter this in QuickBooks.
At the bottom under Transactions will be a list of all the customers and invoice numbers that made up that Payout.
💡If you have two screens, have one open to the LMN Pay Powered by Stripe Payout Report and another with QuickBooks for ease of recording customer names and fees.
Reconcile Deposit in QuickBooks Online
In QuickBooks, click + Create and select Bank Deposit
This action will bring up all your payments currently sitting in your Undeposited Funds (or Payments to Deposit) holding account.
Select the payment(s) that made up your most recent Payout from LMN Pay Powered by Stripe.
Change the date at the top to the day you received that Payout in your bank account.
Choose the bank account you want to deposit these payments into in QuickBooks.
Under Add funds to this deposit, you will:
Choose the expense account associated with tracking transaction fees.
Optional: Type in the Payout Date in Description.
Enter the fees deducted on that payout as a negative amount, for example -$154.29. Make sure to include the minus sign.
The total of the QuickBooks deposit will now match the net deposit total of your Stripe Payout. If it does not, double-check the fee amount and the payments you selected.
Profit & Loss Reporting
It is important to note that although you are entering the fee as a negative on the deposit in QuickBooks, it will show up as a positive amount under that expense in your P&L.
To track this expense, go to QuickBooks > Reports > Standard Reports, and click on Profit and Loss
💡You can favorite this report so it’s easy to find in QuickBooks!
Once the report is open, you'll see the expense account you created from the above section Set up an expense account in QuickBooks (or an existing one you already had created) with a positive amount.
This is how you track your LMN Pay Powered by Stripe transaction fees in QuickBooks: your Profit & Loss report shows exactly what you paid in fees for any period, from a single payout to the full year.
How to Record Net Fees by Customer
If you prefer to reconcile net fees per customer instead of per deposit, or you need to record transaction fees for accounting purposes elsewhere, you can find a list of all transaction fees deducted per payment under Analytics → Invoices → Payments Listing.
You are able to filter by the Date payments were received, CRM Account, Payment Status and Payment Method. If needed, you can also export this list as an excel document.
Recouping Costs in LMN Budget
Tracking the transaction fees you pay each quarter and year helps you forecast them in the overhead section of your LMN Budget. If you choose not to recoup these costs by adding a Processing Fee line item to each invoice, you can add the fees as an overhead expense in LMN and recover them across all your estimates for the year.
Budgeting for online payments is no different than budgeting for Advertising, Marketing, or Shop Supplies. It's simply a cost of doing business, and not charging a Processing Fee on your LMN invoices keeps you competitive with other landscape businesses in your area.
Need more help? Contact our Support Team by email at lmn-support@granum.com, through Live Chat, or by phone at (888) 347-9864
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