Merchant Statements continued

The next part of your Merchant statement contains the transaction detail.  It shows the daily detail of your batch processing.  Included are the day of the month, reference number, the transaction code (deposit, chargeback, adjustment or reversal), type of card used, number of sales and amount of sales.  If you are set up for a daily discount program, previous discount payments would be included also.

The next section is your fee totals.  You will be making a journal entry based on the information included here and in the next section.  Some of these fees might include the monthly terminal rental and per transactions fees incurred.   The statement totals are found in the final summary section.  You will be making an entry for any statement fees and minimum discount fees charged (if you didn’t reach the minimum required for the month).

The IRS allows some merchant fees to be categorized as Cost of Goods Sold (COGS).  So, depending on your accounting, they will either reduce Gross Income or be an expense.   I should make a note here that the gateway fees (what you pay monthly for processing) are not considered COGS but are a dues and subscriptions expense.   I’ll follow with sample journal entries at my next writing.