Why Your Square or Stripe Deposits Are Inflating Your Revenue
Why a Square or Stripe deposit is a net payout, not your revenue, and what your books need to show: payouts, fees, refunds and the related sales.
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Are processor deposits really income?
If your square or stripe deposits are being recorded directly as income, your revenue may not be represented correctly.
What does a net payout hide?
The deposit that reaches your bank is usually a net payout, which means it may already reflect processing fees or refunds. When that net amount is coded straight to income, the details behind the deposit can disappear. Processing fees may never show up clearly in the books. Refunds can create additional inaccuracies.
What happens to your revenue?
and the revenue connected to the original customer payments may be represented incorrectly. The bank deposit is only the amount that arrived. It is not automatically the full story of the activity that produced it.
What does good revenue tracking need?
Good revenue tracking needs the payout, the fees, the refunds, and the related sales activity to make sense together.
Do you need to change settings?
This does not require guessing at software settings or changing transactions at random. It requires recognizing that a processor deposit is a summary amount.
What should you check in your books?
If Square or Stripe is one of the main ways customers pay you, make sure your books are not treating every net deposit as though it were the complete revenue number. Need help getting your books cleaned up? Ta-Da Accounting can help you get back on track.
Need help getting your books cleaned up? Call (310) 800-4494 or send us a note.