Credit Card Surcharges

A credit card surcharge or fee, based on a percentage or a set fee, can be applied to credit card payment transaction types. The below process is for all order types.***

***This configuration does not apply to customers utilizing Momentus Payments for Credit Card Processing.

Context: When configured, a payment added for that transaction type will calculate the fee amount. Two (2) transactions will be added:

  1. An Adjustment transaction. The GL distribution of this amount is based on a Resource associated with the transaction type. The Adjustment transaction type is selected against the Payment transaction type. 
  2. The Payment transaction for the full amount of the invoice/s PLUS the value of the Adjustment.

Note: the coding of journal entries will be:

  1. The Adjustment will debit AR and credit clearing (according to the GL Distribution of the adjustment transaction type). The Resource associated with the adjustment will debit clearing and credit revenue (according to the GL Distribution of the resource). Resulting in a debit AR, credit revenue journal.
  2. The Payment should debit bank/cash clearing and credit AR in the same manner as ordinary payments.

To configure a Credit Card Surcharge or Fee:

  1. Turn On Payment Surcharges
  2. Create the Surcharge Resource
  3. Create the Transaction Method
  4. Create the Surcharge Adjustment type
  5. Apply settings to Payment transaction type

Turn On Payment Surcharges

  1. Click the Accounts Receivable Configuration link from the Main Menu. The Accounts Receivable Configuration screen opens.
  2. Select the Advanced tab.
  3. Check the Advanced Payment Surcharges Enabled check box.
  4. Click OK.

Create the Surcharge Resource

This resource will be associated with the Adjustment transaction type. GL Distribution for this resource should be set to credit the appropriate GL Account for the fees "revenue" and debit a clearing account in the same manner as existing resources.

  1. Click the Resources link from the Main Menu. The Resources screen opens.
  2. Click the Add button. The Add Resources screen opens.
  3. Enter a unique numeric code that starts with in 8 in the Type field. The surcharge resource must be a class 8 resource.
  4. Enter additional resource information as needed, such as department, management report code, tax scheme and any other information that might be relevant to your organization. For more information about adding resources, see Adding a Resource.
  5. Click OK.

Create the Transaction Method(s) 

The transaction method is used to define Receivable Transaction Types. A new method should be added so it can be used when creating the Adjustment transaction type to account for the surcharge or fee.

  1. Click the Transaction Methods link from the Main Menu. The Transaction Methods screen opens.
  2. Click the Add button. The Add Transaction Method screen opens.
  3. Enter the necessary information:
    • Description - Name of the transaction method, such as CC Surcharge.
    • Code - Unique code used by the system.
    • Card Type - The credit card the surcharge applies to.
    • Status - Select Active to apply the surcharge when the card is used as payment.
  4. Click OK. Repeat steps 2-4 for all credit card types which need the surcharge applied.

Create the Credit Card Surcharge Receivable Transaction Type

Use the new method created above to create the Adjustment transaction type to account for the surcharge or fee. The new Resource is assigned to this transaction type to determine the GL distribution for the revenue side of the journal.

Note: some fields may not appear on the layout of this screen. If any fields mentioned below are not visible, edit the layout to include the fields.

  1. Click the Receivable Transaction Types link from the Main Menu. The Receivable Transaction Types screen opens.
  2. Click the Add button. The Add Receivable Transaction Type screen opens.
  3. Enter the below information to create a new Credit Card Surcharge adjustment transaction type. For more information on adding transaction types, see Adding & Editing Receivable Transaction Types. Do not set any required fields for this adjustment type as it is a system-generated transaction.
    • Type - Select Adjustment.
    • Source - Select the payment source.
    • Method - Select the method created in Create the Transaction Method(s).
    • Fee Resource - Select the fee resource created in Create the Surcharge Resource.
    • GL Distribution - Debit AR for the GL Distribution and Credit the clearing account used for other adjustment or invoice transaction types.
  4. Click OK.

Apply the Credit Card Surcharge to the Credit Card Payment Type(s)

The surcharge or fee can be added to existing Payment transaction types. If maintaining a "fee free" transaction type, add a new Payment transaction type with the surcharge or fee assigned.

Note: some fields may not appear on the layout of this screen. If any fields mentioned below are not visible, edit the layout to include the fields.

  1. Select the payment type which the surcharge is needed from the Receivable Transaction Types screen.
  2. Right-click and select Edit. The Edit Receivable Transaction Type screen opens.
  3. Enter the below information. If the below fields do not display, click the Edit Layout link to add them to the screen. If the Edit Layout link is not available, contact your System Administrator.
  4. Click OK. Repeat steps 1-4 for all payment types which need a surcharge.

When processing an order or invoice payment, select the applicable payment transaction type configured in Apply the Credit Card Surcharge to the Credit Card Payment Type(s) from the Transaction drop-down on the Add Payment screen. The surcharge is calculated based on the settings for the payment transaction type. 

When adding the payment to an invoice, two transactions show in the Payments tab. One transaction is for the payment and the other transaction is for the surcharge adjustment.

When adding the payment to an order, four transactions show in the Payments tab. One transaction is for the payment, one transaction is for the surcharge adjustment and two XAPs are created for the surcharge.

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Comments

8 comments

Date Votes
  • Sean Tame
    • Edited

    Can I please clarify a few things here?

    1. Under Create the Transaction Method(s) it says to set the Card Type to the Card the fee applies to.  Is this correct?  I thought that setting is only valid for the actual Payment methods and validates the first number of the card number entered.  Can we not have just one CCFEE method for all cards?

    2. Under Create the Credit Card Receivable Transaction Type it says to set GL distribution, but this also set on the Surcharge Resource.  Or is it that the Resource handles the CR and Trans Type handles the DR?  If this is the case, what journal pulls these to the GL?

    3. Under Apply the Credit Card Surcharge to the Credit Card Payment Type(s) it says to again fill out the Surcharge Resource.  Is this correct?  I would not think the Payment transaction itself has any direct link to the resource.

    4. When adding a Payment to an Invoice, where do the Taxes that are associated with Surcharge Resource get added?

    5. When adding a Payment to an Order, does the Surcharge Resource (and its associated taxes) get added to the Order Items?

    6. When adding an unallocated payment to an AR Ledger, where do the Taxes that are associated with Surcharge Resource get added?

    0 upvotes

  • David Moore

    Hi Sean

    1. Yes, you can have one CC Fee method for all credit cards and it is not compulsory to set the card type on the method. I believe the article is covering the scenario of having separate reporting or GL distributions based on which card type generated the fees.

    2. Resource handles the CR and RTT handles the DR, it is generated through the AR GL source for adjustment transactions.

    3. It is definitely required to be present on the Payment RTT as well, I would need someone else to advise the design reason behind this.

    4. The taxes pull through as a separate line on the journal entry and are reportable using standard EBMS spreadsheet tax reports.

    5. & 6. Surcharges applied using this method (incl. taxes) will all be treated the same, regardless of whether it is added to an Order, Invoice or unallocated.

    Hope that answers your questions.

    Dave

    0 upvotes

  • Sean Tame

    Hi Dave,

    Appreciate the response.

    Can you please let me know when you have an answer for step 3.

    The taxes need to be associated with an order or invoice in some way.  If we were to issue an invoice that contained an order paid via card that included a cc fee OR if we were to re-print an invoice that was paid via card that included a cc fee, the taxes amount on that invoice would have to include the amount of tax associated with the cc fee.  If the taxes are only displayed on the journal then I do not see how this is possible.  The journal might not exist at that point.

    0 upvotes

  • David Moore

    Hi Sean

    Sorry, I should have said they don't appear on-screen until the journal. Records are written into the database for the adjustment which include tax details, with a customised invoice report I believe you could display those details including GST on the invoice/order reports.

    Dave

    0 upvotes

  • Sean Tame

    What table are Adjustment Taxes stored in?

    1 upvotes

  • Brett Ward

    Why can’t you add surcharges to deposits?

    0 upvotes

  • Lauren Curd

    Hi Brett - 

    We will get this article updated as we do allow deposit transactions to be used now.  Originally, deposits were not allowed due to the auto-reversal of deferral revenue.  This has been adjusted in .95 and above to ensure that we handle the deferred reversal correctly when fees are applied to deposit transactions.

    Thanks!

    Lauren

    0 upvotes

  • Brett Ward

    Great, thanks Lauren!

    0 upvotes

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