Card Processors That Net Fees Can Quietly Distort Revenue if You Let Them
Many card processors deposit funds net of fees, which makes reconciliations tempting to simplify. If the net deposit is recorded directly as revenue, the bank will reconcile cleanly, but revenue will be understated and fees will disappear into the clearing process.
The cleaner approach is to record gross receipts and processing fees separately in the general ledger, then clear the net amount to the bank. This keeps the reconciliation aligned with what the bank actually deposited while preserving the full revenue amount in your books. Fees remain visible, traceable, and reportable, which matters for management review, audits, and grant reporting.
When this structure is used consistently, reconciliations close faster and financial statements tell an accurate story. Revenue reflects what was earned. Fees reflect the true cost of collecting it. The bank activity lines up without forcing explanations later.
This video is for finance teams handling credit cards or online payments who want reconciliations to balance without compromising revenue reporting. It is not intended for organizations that are comfortable trading accuracy for short-term convenience.
McGovern Consulting Group provides MIP Accounting® Training and Implementation Services. We focus on transaction design because the way entries are structured determines whether reports hold up over time.
If you want your bank reconciliations to match cleanly while keeping revenue reported correctly, schedule time with us to review your setup.
https://mcgoverncg.com/schedule/
If you would rather build a stronger foundation first, free MIP® fund accounting training is available here.
https://www.freemipfundaccountingtraining.com/
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