Top 3 Financial Issues Using 3rd Party Processors and What to Do

3rd Party Merchant Account Processors are defined as businesses who receive and accept transactions completed by card, on behalf of you. A few examples are PayPal, Square, Intuit Payments, as well as Stripe. There are too many to list but choosing a reputable processor that integrates with your QuickBooks Solution seamlessly is crucial to the longevity of your ability to accept card payments within your business.

While perfection is hard to attain, quality expertise in the variety of technologies available to an American Small Business owner to choose from, is something Business Cents is proud to have achieved. Working with a team like us allows our clients to rest comfortably knowing that there is more than one person confirming the solution provided to you really is the best of the best.

Knowing how these accounts connect to the suite of QuickBooks solutions is a feat all of its own, let alone how all of those accounts talk to each other! We wanted to let you know about our team’s top three major concerns we have about the mishandling of these software solutions.

There are multiple major concerns when it comes to not handling these accounts correctly. You can:

  1. Overstate your Income

  2. Pay Too Much in Taxes because you Overstated your Income

  3. Unable to Pay the State the Sales Tax you Collected from Customers

Do you have a solid process of when income is recognized when using this type of software? Now is the time to take a look and ensure that all your bases are covered! In our experience, we’ve noticed that income is usually recorded each and every time these applications talk to one another. You could be paying taxes on transfers from your PayPal account to your Business Checking accounts and not even know it.

Since the mishandling of these programs can cause duplicate transactions landing on your account registers, you can also begin to bounce checks when relying on your balances to pay bills. That is never good!

Our third major concern simply put is: if your processor does not break out the Sales Tax that they have charged your customers from your daily deposits, you are paying taxes on a liability owed to the state. That also means your balance sheet is incorrect due to that liability not being represented correctly.

Knowing how to accurately handle the bookkeeping for these types of accounts is extremely important when it comes to portraying the health of your company. Here at Business Cents, we have been there and done that for many industries. A few include Chiropractic, Orthodontic, Dental and Doctor Practices, Amazon Resellers, Manufacturers and many more.

We offer a FREE 1/2 hour consultation where you get to know us and how we do things, so let’s schedule some time to see if what we do is what you need!

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