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Hello Everyone!
Our not-for-profit receives donations through the mail by check and through online donations where we use Blackbaud Merchant Services. My question involves the best way to process the credit card fees from Blackbaud.
Blackbaud deposits to our bank account each week the total amount of donations received, but subtracts two types of fees. For those donors who have set up a bank draft through Blackbaud the fee is $1.50/transaction regardless of the total amount of the donation. For those who use a debit or credit card processed through visa/mastercard/discover etc., then there is a percentage fee that is applied. Each week Blackbaud deposits (via EFT) to our bank account the total dollar amount of all donations for the week, minus the various fees involved. We get an excel report of each transaction including fees with the totals at the bottom.
Here's how I had thought we could handle these:
1. Set up recurring journal batches for these donations. Most are the same amounts from the same donors every month. Some are first-time or one-time donors or at least irregular donors. These latter we classify as variable and only post donations from them when there is occasion to do so.
2. Set up the fees payment as a variable payment to vendor in another batch dedicated to payments of expenses.
3. So, each week post the donations from one batch and the expense/payment to vendor from the other batch.
4. Then, using the Deposits function we list all of the individual donations and apply the previous journal entries to those deposit lines.
5. Add a line to the deposit for the fees that Blackbaud subtracted from the total donation amount. This amount would be entered as a negative number and applied to the journal entry for the "purchase invoice" created from the recurring general journal.
I hope I have made clear what we're trying to do. My question is:
Is this a valid or workable way of handling these deposits that include credit card fees? Is there an easier or better way of doing it? Should the fee actually be considered a "payment to vendor" or perhaps some kind of "credit memo" or something else?
Thanks in advance for anyone kind enough to wade through my long explanation and try to help me!
Wes Baker
You'll need to get your credit card statement first. Then divide the total amount deducted for processing by the percentage of your total monthly sales that were paid using credit cards. Your effective rate is the entire amount your credit card company charges you as a result of this calculation. For more details to check out the page https://rateking.net/.
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