How to Record AdvicePay Deposits in QuickBooks Online

Posted by The Bean Team on 3/24/20 8:00 AM

How to Record AdvicePay Deposits in QuickBooks Online

6 MIN READ

Let’s talk about AdvicePay. We work with many advisors here at FABC who use this billing and payment solution—after all, it’s specifically designed for fee-for-service financial planners.

So, how do you enter income billed through AdvicePay? You have a few options. Let’s break them down.

The bottom line looks something like this:

  1. Record your gross revenue
  2. Record your payment processing expenses
  3. Report Net Income

You need to record gross income and you need to record the payment processing fees charged by AdvicePay. These are not discounts. These are the usual fees charged by a third-party payment processing service such as Stripe or PayPal.

Let’s Look at Your AdvicePay Account First

For our example, we are going to record the income after we have already seen it show up in our checking account. To do this, log into AdvicePay and navigate to “Client Transactions”. Scroll down to “Completed Transfers”.

Before expanding any single transfer, you’ll see three columns of information: Arrival Date, Bank Deposit, and Status. Because we are looking at payments that have already been processed, the status on these transactions will be “Paid”. The Bank Deposit is the net of the gross income you billed your client less AdvicePay’s transaction fee. And the Arrival Date is the day these funds were deposited to your linked checking account. But we need to expand the transaction to have enough information to get to the bottom line.

Click the arrow to the left of the Arrival Date. You’ll now see nine sub-columns of information: Advisor, Client, Payment Type, Transaction Type, Gross amount billed, AP Fee (the AdvicePay Fee), Total net deposit, Paid Date, and Invoice Number. If you click on the invoice number, you will see a copy of the invoice you sent your client. The expanded invoice will contain the actual billing date.

We now have the information we need to cover three different methods of recording AdvicePay income.

Let’s walk through a scenario.

ARRIVAL DATE BANK DEPOSIT STATUS
02/03/2020 $98.50 Paid
ADVISOR CLIENT PAYMENT TYPE TRANS TYPE GROSS AP FEE TOTAL PAID DATE INVOICE
Jane Smith Austin Brown CC Charge $100.00 $1.50 $98.50 01/31/2020  

For this example, we are going to say our advisor, Jane, billed her client, Austin, on 01/31/2020 for Financial Planning Services for the month of January with a due date of 01/31/2020. Okay, let’s get to work.  

Three Ways to Record Income Received Through AdvicePay

Personal bookkeeping and record keeping preference will determine which of the following data entry methods best meets your needs. We will record our income to an income account called Financial Planning Income and our AdvicePay transaction fees to an expense account called Merchant Deposit Fees.

Method #1: Invoice –> Receive Payment –> Record Deposit and AdvicePay Fees-->Match Deposit

1. Invoice: Recreate the invoice from AdvicePay in QuickBooks Online. Be sure to enter the correct billing date (01/31/2020), due date (01/31/2020), client name (Austin Brown), gross amount ($100), and type of Product/Service (Financial Planning Income). Save the invoice.

2. Receive Payment: Austin paid on 01/31/2020. So, we will receive payment to the open invoice on 01/31/2020. Consider adding the AdvicePay invoice number (#1234) in the memo line for your reference. Most importantly, record this payment to the account called Undeposited Funds, NOT the checking account. Save and close the payment receipt.

3. Record Deposit and AdvicePay Fees: We still need to address the AdvicePay Fees. This is done when we record the deposit. Click the “+ New” and under “Other” select “Bank Deposit”. Under the Account drop down arrow, select the checking account into which you receive AdvicePay deposits. Enter the date you received payment (Arrival Date, 02/03/2020). Check the box next to Austin Brown’s payment receipt. At the bottom of the screen you will see “Add funds to this deposit”. You may need to click the drop-down arrow on the left to expand the area. This is where we record the AdvicePay transaction fees.

#

RECEIVED FROM

ACCOUNT

DESCRIPTION

PAYMENT METHOD

REF NO

AMOUNT

1

AdvicePay

Merchant Deposit Fees

(can be left blank)

AdvicePay

#1234

-1.50

Be sure to enter the transaction fee as a negative number. When you look at your total deposit it should match the Bank Deposit of $98.50 shown in the AdvicePay Completed Transfer page.

In the event you received two client payments in one deposit, you would repeat the first two steps for the other client and then select both client payments in step three and record the total AdvicePay transaction fees for the two clients.

4. Match Deposit: If you use the automatic banking link option, then you’re ready to match the AdvicePay deposit you just entered with the deposit pulled over in the bank feed. Go to your bank feed screen in QuickBooks Online. You may need to refresh the page to see the suggested matches. If you don’t see a match for your AdvicePay deposit, double-check to be sure you entered the correct checking account and totals when creating the AdvicePay deposit. Match the deposit.

If this seemed like a lot, don’t worry. We still have two more methods to cover.   

Method #2: Sales Receipt –> Record Deposit and AdvicePay Fees --> Match Deposit

1. In this case, we are going to skip recreating the invoice and create a Sales Receipt showing Austin Brown’s payment. Enter the Sales Receipt Date as 01/31/2020, the same as the Paid Date. Consider adding the invoice number as the Reference Number, #1234. The amount billed will again be the Gross of $100. The Produce/Service will be Financial Planning Income. Most importantly, record this deposit to Undeposited Funds. Save and close the sales receipt.

2. Refer to step #3 from Method #1 above. Add a deposit, select the Sales Receipt for Austin Brown, and record the AdvicePay Fees with the deposit, paying close attention to dates.

3. Match the deposit. Refer to Method #1, step 4 for instructions.

But wait, we can simplify this even more and still get the job done.

Method #3: Record Deposit and AdvicePay Fees --> Match Deposit

1. We are going to simply record Financial Planning Income from Austin Brown and the AdvicePay transaction fee at the same time. Click the “+ New” and under “Other” select “Bank Deposit”. Under the Account drop down arrow, select the checking account where you receive AdvicePay deposits. Enter the date you received payment (Arrival Date, 02/03/2020). At the bottom of the screen you will see “Add funds to this deposit”. You may need to click the drop-down arrow on the left to expand the area. This is where we record the Financial Planning Income and AdvicePay transaction fees.

#

RECEIVED FROM

ACCOUNT

DESCRIPTION

PAYMENT METHOD

REF NO

AMOUNT

1

Austin Brown

Financial Planning Income

(can be left blank)

AdvicePay

#1234

100.00

2

AdvicePay

Merchant Deposit Fees

(can be left blank)

AdvicePay

#1234

 -1.50

And if you have more than one client in each deposit, simply select “Add Lines” and include their information in the deposit as well. Be sure to enter the transaction fee as a negative number. And, your total deposit should match the Bank Deposit of $98.50 shown in the AdvicePay Completed Transfer page.

2. Match the deposit. Refer to Method #1, step 4 for instructions.

Closing Thoughts

Methods 1 and 2 allow you to see payments tied to specific clients. With Method 3, although the client name is included in the deposit, you will NOT see this payment under that client’s profile under the Invoice and Customer area in QuickBooks Online.

If you use the automatic banking link to QuickBooks Online, it is best practice for AdvicePay income to match deposits in the bank feed with deposits you have entered as opposed to matching a deposit with “Sales Receipts” or “Payments”. This is suggested as we don’t capture the AdvicePay transaction fee until we record the deposit.

Still feeling a little overwhelmed? Let us take care of your AdvicePay entries for you.

Tags: financial advisors, Financial Planning Firm, Financial Planning, bookkeeping, Outsource, Outsourcing, FA Bean Counters, quickbooks online, quickbooks, AdvicePay

Subscribe to Email Updates


Popular Posts