Merchant Account Accounting

How to reconcile? Some txn are one rate, some another rate.

[philbish]

I'm with linkpoint api, and card service intl.

My "discount rate" is around 2.5%, and the "non-qualified" rate is around 5.0%

From my understanding, the "non-qualified" rate is charged on business credit cards, international credit cards, or credit cards where a 3-digit card code is not present.

But they say there is no way to determine which rate was charged for each transaction.

Right now, my accounting works like this:

1) customer places order

2) I create a ledger entry in my accounting system:
ledger side: + Assets (Receivables)
offset sides: + Revenue (Product Sales / Shipping Revenue / Sales Tax, etc

3) I create another ledger entry in my accounting system based on a fixed 2.5% of the order total:
ledger side: - Assets (Receivables)
offset side: + Expenses (Credit Card Fees)

I have a CRON that runs everyday. It journals money from the Receivables account to my actual bank account for orders 3 days in the past. But it is not always accurate because of holidays. And what if my server time is on a different time zone than the credit card company? Or even a few minutes off?

And at the end of the month/year I make an adjustment to my books, to get mine to match what the credit card company shows. I just have to trust them in good faith.

-> How do big companies deal with this? They could easily have millions of dollars unaccounted for.

[Corey Bryant]

Have you signed into MyMerchantOffice - that will give you the correct amount.

Also you should request a rate review - you should be paying at least 10 base points lower unless you are high risk or have a number or chargebacks

-Corey

[edited by: lorax at 6:15 pm (utc) on Jan. 23, 2007]
[edit reason] removed DN [/edit]

[philbish]

Yep I've been to MyMerchantOffice, but I don't think the data will help me much.

I'm trying to figure out on a per transaction basis what the discount rate is, so I can calculate the correct amount to record for my accounting.

[edited by: lorax at 6:15 pm (utc) on Jan. 23, 2007]
[edit reason] removed DN [/edit]

[lgn1]

Have you tried moneris. They have one flat rate around 2.0 to 2.3% depending what you are selling.

If you are paying 5% for a unqualified rate, and you are not in a high risk business, you are being taken to the cleaners.

[CernyM]

I'm trying to figure out on a per transaction basis what the discount rate is, so I can calculate the correct amount to record for my accounting.

Why do you need to know the specific fees on specific transactions for accounting?

Are you letting them take the fees out of each deposit? If so, ask them to switch you to monthly.

[philbish]

I didn't realize monthly was an option! That would solve many of my problems.

[sun818]

I do monthly for the same reason as well. Its a lot easier to aggregate a percentage cost for all transactions. Now if I can send Discover & AmEx only to Paypal Virtual Terminal through an API. ;)

[Corey Bryant]

Yes - Cardservice offers you the option to take everything out in one lump sum. Contact your agent for help. Usually he / she will just want you to fax over a the request

-Corey

[brandyace]

Of course, your agent might not be too anxious to send you over forms. He or she is on the beach living it up on the crazy rates you are paying. At least 125 basis points too high. Or more.

[philbish]

Ok the exact amount I'm paying. Still too high?

2.35% for Qualified Sales
4.30% for Non-Qualified Sales

84% of credit card sales went through with Qualified
16% of credit card sales went through with Non-Qualified

[Corey Bryant]

Depends on your volume. Usually you can get about 2.19% for anything over $10,000. More volume can mean lower discount rates. More transactions can mean lower transaction rates.

It is not black and white unfortunately. You account is taken into effect (i.e. chargeback for example) as well.

-Corey