There are 2 ways to pass fees onto clients. You can create the fee as an Other Cost or you can create the fee as an item.
Adding Other Cost
Some states do not allow you to pass your fees to your client. You can get more detail here from the Visa website. If you decide to charge a convenience fee or offer a "cash discount", please confirm with your CPA and/or attorney regarding legality.
Create an Other Costs Record
First, you should create an Other Cost for "Convenience Fee".
You can name this whatever you like.
- Select Settings
- Select Other Costs
- Select New
For the purposes of this demonstration, we created an income account called "Convenience Fee Income" and an expense account called "Convenience Fee Expense".
You will not have these accounts by default but can add them if you like within your Chart of Accounts.
Alternately, you can use an existing account.
Confirm with your accountant if this fee is taxable or not.
Add Convenience Fee to the item
- Open the item
- Click Other Costs
- Select "convenience fee" (or whatever you named yours)
- Enter the amount to charge your client in the "Selling" field
- Save and Close
Creating Fees as an Item
Just like creating a regular item, start by:
- Click on + New and select Item
- Select the Client/Project and your firm as the Vendor (you might need to create a vendor address for your firm)
- Assign it a Sales Code (This step should be done prior to creating the item
- Enter in the Unit Cost
- Save and Close
At this point, you can add an item or client description and add it to a proposal or invoice. If you are working with a percentage rather than a flat fee, you would have to manually calculate the amount for either option.
Pro-Tip: Clone the Fee Item you created for any project you need to apply it to.
Note: Although you could potentially enter the fee that Payroc will charge you into the Purchase field, due to the various fees and rounding differences, it is not recommended. It is easier to just deduct the total charges from your Payroc statement at the end of each month as it is deducted from your account.