The three numbers
There are three things to compare: gross sales, processor fees and net payout. Gross sales minus fees, refunds and adjustments equals the amount sent to your bank. Your books should record the gross amount as income and the fees as an expense.
Recording only the net deposit hides the fees, understates sales and may affect sales tax reporting and your tax return.
Use a clearing account
Create a processor clearing account. Record gross sales into it as they happen. Record fees and refunds against it. When the payout arrives in the bank, move it out of the clearing account. At the end of each period the clearing balance should be small and explainable, such as sales not yet paid out.
This structure turns a confusing situation into a simple reconciliation.
Matching a payout
Download the payout report from the processor. It lists the sales, fees and adjustments that make up each deposit. Compare it with what you recorded. Many platforms integrate directly with accounting software and create the entries for you, but verify them against the report.
If an integration is used, check how it records tips, taxes and gift cards, since those can land in unexpected accounts.
Timing differences
Sales made on the last days of the month often pay out in the next month. That is why the clearing account balance should equal sales awaiting deposit. Check the first payout of the new month to confirm.
Delayed or held payouts, reserves and failed payouts also create differences. Contact the processor if an expected payout is missing.
Fees, taxes and tips
Fees can be per transaction, monthly or for added services. Categorize them as merchant fees, and run the total each quarter to see the real cost of accepting cards. Sales tax collected should go to a liability account, not income, and tips owed to staff go to a payable.
Monthly, compare processor gross sales with the sales in your books. They should agree after allowing for refunds and timing. If they do not, find the gap before you file sales tax or tax returns.
A small reconciliation example
Say a week of card sales totals a round gross figure, fees come to a small percentage, and one refund was issued. The payout in your bank equals gross minus fees minus the refund. In the books, gross sales go to income, fees to merchant fees, the refund to sales returns, and the payout clears the processor account. If the bank deposit does not equal that math, one of the pieces is missing and the payout report will show which.
If you use more than one processor or marketplace, give each its own clearing account so problems stay isolated. Reconcile each to its own payout report, then total them against the revenue section of your profit and loss.
Worked example with numbers
Sales for the week are $5,400 gross. The processor deducts fees of $156.60 and refunds of $120, so the deposit should be $5,400 - $156.60 - $120 = $5,123.40. Record sales $5,400, fees $156.60 and refunds $120 through a clearing account, then the $5,123.40 deposit clears it. If the bank shows $5,100, you are $23.40 short: look for a dispute or a fee not in the report.
Mistakes that cost money
Recording deposits as sales. Missing tips and sales tax in the gross. Ignoring timing at month end.
Check your work
The clearing account should be zero or equal to the amount in transit.
Common questions
Should I record the net deposit as income?
Generally no. Record gross sales and show fees as an expense.
Where do I find fees?
In the processor dashboard under reports, statements or payout details.
What about disputed payments?
They show as adjustments or withdrawals. Record them as chargebacks and track the outcome.
This guide is general information, not tax, legal or accounting advice. Rules, fees and due dates change; check with the IRS, the NJ Division of Taxation or a licensed professional for your situation.
