Merchant Funds and T-Accounts

AR Automation is available to all customers operating in US Dollars. To activate this feature, please send an email to licensing@accountingseed.com.

Overview

When Cardknox is set up as a Payment Processor, your Bank GL Account, a new Merchant Bank GL Account (cannot be the same as the Bank GL Account) and a new Merchant Fees GL Account are identified. Cash Receipts from all Cardknox payment processing, initially post to this Merchant Bank GL Account. The Merchant Download job then moves the funds from this GL Account to the Bank GL Account through the Journal Entry Lines.

The following T-Accounts illustrate this process for a sample set of transactions. For the first Billing, the payment is processed for $100.00, and the Cash Receipt debits the Merchant Bank GL Account and credits the Unapplied AR GL Account. The second payment for $200.00 is similarly processed.

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When the batch is settled in Cardknox, and the Merchant Download job runs, it creates Journal Entry Lines to move the funds (total amount of all the Cash Receipts in the batch) from the Merchant Bank GL Account to the Bank GL Account, while the other two lines show the movement of fees charged by Cardknox out of the Bank GL Account and debiting the Merchant Fees GL Account.

Note: Click here to view the above image in full screen.

Convenience Fees

Convenience Fees can be automatically charged for payments that your customer directly pays you (PaymentSITE payments), as well as when payments are made via the Billing payment screens (detail and list view) in Accounting Seed.

When a payment is processed, the Cash Receipt is created for the gross amount (Payment or Billing Amount + Convenience Fees). If the payment is linked to a Billing, it would also then be applied to it by the Billing Cash Receipt (BCR). However, the Convenience Fee amount on the Cash Receipt cannot be applied. Instead, these Convenience Fees are recorded as additional Journal Entry Lines in the Merchant Fund Transfer Journal Entry when the Merchant Download job runs.

In the T-Accounts below, several payment use cases are shown, along with the related entries. Once the batch is settled, two lines are created, which will post a debit to the Unapplied AR GL Account and a credit to the Convenience Fess GL Account for the same amount of the Convenience Fees charged in the batch.

Note: Click here to view the above image in full screen.