How to Bookkeep Net Settlements
Last updated Jun 3, 2025
This guide shows you how to properly record net settlements from credit card transactions in your accounting software.
1. Understanding Net Settlements
When a customer pays by credit card, the full amount is processed, but your business receives a net amount after card processing fees are deducted.
Example:
A customer makes a £100 sale.
Your card processor charges a 2.5% fee (£2.50).
You receive £97.50 in your bank account.
2. Journal Entry #1 – Sale Recorded
Ignore the card fee in the first entry. You record the full sale amount:
| Date | Account | Notes | Debit | Credit |
|---|---|---|---|---|
| X/XX/XXXX | Accounts Receivable | Credit card sales: Delayed payment | £100.00 | |
| Sales | £100.00 |
3. Journal Entry #2 – Settlement Received
When the credit card settlement is paid to you:
| Date | Account | Notes | Debit | Credit |
|---|---|---|---|---|
| X/XX/XXXX | Cash | Credit card sales | £97.50 | |
| Credit Card Expense | Processing fee | £2.50 | ||
| Accounts Receivable | Payment cleared | £100.00 |
✅ You're Done
These two entries ensure your books reflect both the gross revenue and processing fees correctly.
Need Help?
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