Refunds, Merchant Fees and Split Transactions

gtbjj

I am using a third-party app w/ Stripe to process payments and also have my bank account connected to automate transactions in Wave. I want to match the accounting transactions as close as I can with the bank deposits without having to create additional transactions or journal entries to balance them out.

The problem is that I am having difficulty recording "gross sales" and am not sure how everyone else is recording them in Wave. What is the best way to record refunds and merchant fees based on the bank deposit?

Couple questions below:

1. When Stripe does a payout, it processes orders for that time period in a group/batch, which also subtracts any refunds or merchant fees. Wave only sees the bank deposit and records the total amount. What is the best way to record that deposit transaction in Wave accounting? Should I use "Split Transaction" or do I need to make separate transactions for refunds and merchant fees? My goal is to minimize creating additional transactions or records as much as possible....so each deposit stays consistent with the bank imports.

Ex (Stripe Payout):
6/1 - $100
6/1 - $100
6/1 - $100
6/1 - Refund (-$100) "Withdrawal"
6/1 - Merchant Fees (-$20) "Withdrawal"
Total: $180 "Deposit"

*For now...I created new income accounts for "Refund" and "Merchant Fees" under [Discounts and Fees] to split the transaction. I think this is the only way it can record a subtraction for a payout/deposit. I have a separate spreadsheet on how Stripe's gross sales breakdown on refunds and merchant fees. All Wave sees is the bank import deposit.

2. When there is a single transaction in a total Stripe payout that is a "refund", Wave sees the withdrawal from my bank account and records it as a "withdrawal" under [Refund from Sales]. If I created an income account named "Refunds" under [Discounts and Fees] it does not allow me to select this option for this withdrawal. Vice versa, it doesn't allow me to select [Refund from Sales] when splitting a transaction for times when I have a singled deposit that includes a mix of refunds and new sales.

This forces my P&L report to show refunds in 2 different places based on my current setup:
- debit column under sales (if Wave records a transaction as a withdrawals)
- (negative) amount under sales

This wouldn't be too much a problem if the Stripe payouts did not include any refunds. Any advice would be helpful.

KiahD

Hey @gtbjj !

Firstly, you can use either method to record your payouts, however I recommend using the split transaction method for the payout and fees, as it links the merchant fees with the payout they are associated with. The total here would be the gross amount (not accounting for refunds, see below), and the splits will be the net income and the merchant fees.

You're correct in creating a new Discount Income account to account for the Merchant fees within this payout, as this is currently the only way to do so within the transaction itself. However using this method to account for refunds doesn't allow you to use the same account with singular refund transactions, as you have discovered.

As this is the case, what I would recommend is recording the refund portion of the payouts separately. Then you can select the Category Refund for Income > Income account, rather than having to use a separate Discounts account.