Why This Matters

Processing fees can become a significant expense for businesses that accept credit cards or sell online.

If you record only the amount deposited into the bank, your financial statements may understate both your sales and your expenses.

That can make it harder to understand your true revenue, margins, and cost of accepting payments.

Common Mistakes

• Recording only the net deposit as income

• Ignoring processor fees

• Recording fees inconsistently

• Combining processing fees with unrelated bank fees

• Forgetting fees charged by marketplaces

• Failing to review how much payment processing actually costs the business

Harvest's Recommendation

Create a separate expense category for merchant or payment processing fees.

Reconcile those fees to reports from Stripe, Square, PayPal, Shopify, your credit card processor, or other platforms.

As the business grows, also review the fees periodically. Small percentage differences can become meaningful when transaction volume increases.

Good to Know

Payment processing costs can affect pricing decisions.

A 2%-3% expense may seem small on an individual sale but can become a significant annual cost for a high-volume business.

Understanding the total cost helps you evaluate pricing, margins, and payment methods.

When It's Time to Get Help

Consider talking with your accountant if:

• Your deposits never match your sales reports

• Processing fees are becoming a significant expense

• You use multiple processors

• You are unsure whether fees are being recorded correctly

• Your reported revenue seems lower than your platform reports