The MP Xero Connector is flexible in terms of which accounts of your business are used when posting invoice payments, and adding any optional surcharges. The following is for demonstration how the accounting can be handled following Xero best practices.
Standard accounting
For the standard accounting it is recommended to add a Mobipaid clearing or suspense account to the charts of accounts. This would be a Current Asset with "Enable payments to this account" activated.
The accounting entries are then as follows:
Transaction
| Amount
| Debit
| Credit
|
|
Invoice issued | $100.00 | Accounts Receivables | Sales |
|
| Payment | $100.00 | Mobipaid Clearing | Accounts Receivables | automated |
Mobipaid settlement | $96.00 | Bank account | Mobipaid Clearing |
|
Bank charges | $4.00 | Bank charges | Mobipaid Clearing |
|
Surcharge accounting
If you opt to add an automated surcharge of, for example 4% to recover bank charges, then in addition to the Mobipaid clearing account you may wish to add another account to your charts of accounts to provide for the bank charges. In this example, we call this account "Bank dues".
The accounting entries are then as follows:
Transaction | Amount | Debit | Credit |
|
Invoice issued | $100.00 | Accounts Receivables | Sales |
|
Surcharge | $4.00 | Accounts Receivables | Bank dues | automated |
Payment | $104.00 | Mobipaid Clearing | Accounts Receivables | automated |
Mobipaid settlement | $100.00 | Bank account | Mobipaid Clearing |
|
Bank charges | $4.00 | Bank dues | Mobipaid Clearing |
|
If the "Bank dues" account reflects an over- or under-recovery balance, this can then be posted through the income statement.