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How to Properly Account for Debit/Credit Card Payment on POS Terminal in QuickBooks Desktop

POS terminal is a portable point of sale machine that lets you accepts credit and debit card payment on the go. Businesses use POS terminal to give customers, who aren’t comfortable carrying cash, an alternative method to pay for products or services rendered.

Since the introduction of this point of sale machine, transactions value processed had since hit a high of N1.4tr, according to 2017 data presented by Nigerian Inter-Bank Settlement System. There are an estimated 155,462 active POS terminals already made available to retailers or merchants in Nigeria.

While the growing adoption of POS is a positive development which isn’t unconnected to the fact that Nigerians are now using less cash for transactions and more POS as a preferred settlement method, there seems to be a noticeable accounting and financial challenge brewing from this payment method. Businesses that aren’t using point of sale software like QuickBooks POS software or other POS for making sales are finding it difficult to account for their actual bank balances in real time due to delay in POS transactions settlement.

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For over 5 years, we have implemented QuickBooks for several companies under Retail, Manufacturing, Oil & Gas, Real Estate & Construction, Travels, Hospitality,Legal, Co-operatives, NGOs, Financial & Service Sectors.
  • Mbaire Services Nigeria Ltd(Construction)
  • Chisco Transport Limited(Transport)
  • Aristokrat 360 Limited(Creative & Media Agency)
  • Alpha Pharmacy (Health Care & Supermarket)
  • Hawkes Legal(Legal)
  • OPI Nigeria International Limited (Oil & Gas Servicing)
  • Zenilum Company Limited (Oil & Gas Servicing)
  • Lilygate Hotel(Hospitality)
  • Josien Holdings Limited(Distribution)
  • Aisha Buhari Foundation (Futured Assured)(NGO)
  • Doheney HR Services(HR)
  • Biddel Oil & Gas Limited (Oil & Gas)
  • System Intelligenz Limited(Contractor)
  • MagTech Information Security (IT)
  • Infusion Cakes Nigeria (Bakery)
  • Landmark Centre (Event Centre)
  • Mountain Ice Travel & Tour (Travels)
  • BTS System (Service)
  • Logos Travel Support & Solutions Ltd (Travels)
  • Germaine Auto Centre (Autos)
  • BD Consult (PR)
  • Starlight Nigeria (Retail)
  • Temple Private School (Education)
  • C. Charles Resources Limited (IT consulting)
  • Adeniyi Coker Consultants Limited (Real estate and construction)
  • The Nigerian Economic Summit Group (NGO)
  • Value Mart Supermarket (Retail)
  • Transweb Bureau De Change (Financial Service)
  • Wakanow Travels (Travels)
  • Vektro Food Limited (Manufacturing & Retails)
  • Orient Petroleum PLC (Oil & Gas)
  • Plus More

If you are currently using QuickBooks Pro, Premier or Enterprise Edition and accepts payment via POS terminal, this guide will help you find a better path to tracking all POS transactions in your accounting software.

Normally, it takes 2-3 days for banks to credit merchants account for the value of POS transactions carried out in store or their various offices, account officers or cashiers from their end make the mistake of recording this customer payment as cash received into the bank which results in an increase in QuickBooks bank balances but there was no immediate corresponding increase in the actual balance.

Here is an issue we recently resolved in one the fast-growing hotels in Lagos:

A customer booked a room for 3 days at N24,500 and paid N73,500 via his debit card using the POS terminal. The payment was debited from the guest’s bank account but wasn’t credited instantly to the merchants’ account, the cashier recorded the transactions as cash received and saved directly to Zenith bank.

In QuickBooks, the Zenith bank balance increased by the customer payment but the actual balances as shown on their internet banking portal remained the same; payments like this required them to wait for 2-3 days before the cash is cleared.

Such delayed inflow creates an imbalance between their bank account and QuickBooks figure which makes reconciliation difficult.

Our Expert Advice:

We recommended that a separate account head under “Chart of Account>Bank” tagged “Zenith POS Payments“. This account served as a receiving bank for all POS transactions for the day which they could also use to track all the value of POS payment processed on a daily, weekly, monthly or annual basis.

On their financial report, they saw that their Zenith bank balances in QuickBooks weren’t affected by POS payments. The moment the bank credited all POS transactions into their account, then the “transfer fund” window in QuickBooks was launched to move all cash received into “Zenith POS Payment“, to “Zenith bank” in QuickBooks while POS charges are written off to the “Bank Service Charge” account.

The idea is to separate all POS payment from the actual cash payment; until the POS transactions are credited to your business account, you aren’t supposed to treat them as actual cash received to avoid overstating your bank balances, so it’s best to create a settlement bank account tagged “{Your Bank Name} POS Payment

That’s all for now. If you have issues tracking your POS transactions in your book or would like us to implement QuickBooks, please click here to share your questions or connect with us at info@accountingsoftware.com.ng or 08105090001, our team is waiting to support you.

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