Recording Cash App Fees

[FirstMOBC]

We have some members to use cash app for donations. Cash App deduct fees when the money before it is withdrawn. How are we to account for the donations and the fees?

[mcbroshar]

Create a contribution fund that credits an expense account. When entering the contribution, give the full value to the revenue account and then enter a negative amount to this newly created contribution fund. The posting for the entry will then give you full revenue, an expense for the fee, and the net amount hits your cash account.

[NeilZ]

We have some members to use cash app for donations. Cash App deduct fees when the money before it is withdrawn. How are we to account for the donations and the fees?

Here's the solution that we've been suggesting whenever such online systems are used, other than Vanco: (H/T jwdick & JohnDMeyers). This gives full transparency to the internal funds transfers.

You would need to have some additional accounts setup in your Chart of Accounts (account numbers are suggestions, customize to your system):

A new asset:
01-1140-000 PayPal

and a new expense:
01-5875-000 PayPal Fees Expense

In Contributions, you have these accounts setup in a new Contribution Fund, PayPal:
Bank account: 01-1140-000
Income: 01-4110-000 (standard contributions income)

for a $100 contribution the system would create this transaction when posting:
CR 01-4110-000 Contributions Income $100
DB 01-1140-000 Paypal $100

In Fund Accounting, you make this manual transaction for the fee:
CR 01-1140-000 Paypal $3.50
DB 01-5875-000 Paypal fee $3.50

When you transfer the money from Paypal to checking you create this manual transaction:
CR 01-1140-000 Paypal $96.50
DB 01-1110-000 checking $96.50

[FirstMOBC]

Thank you for the information.