QuickBooks integration fees as Journal Entry option explained

One of the options for how you'd like to track the payment processing fees in your Quickbooks is the ability to create a separate transaction representing the fees i.e. Journal Entry. Please see below sample images as reference for the rest of this article:

The option to integrate processing fees as separate journal entries.

How the Donations are mapped for sales receipt creation

Big picture (what you’re doing)

You are:

Recording the donation itself as a Sales Receipt or Payment
Recording the payment processing fee separately as a Journal Entry

That separation is very common and is often preferred by accountants because:

Revenue stays gross
Fees are clearly tracked as an expense
Deposits reconcile cleanly with the bank

Preparing the Journal Entry

When the integration is preparing the journal entry during the sync process, the following logic is applied:

Online donations may incur a payment processing fee. The full donation amount will be sent to QuickBooks as a Sales Receipt or Payment (based on your preferences above). Payment processing fees are recorded separately in QuickBooks as Journal Entries.

If your organization pays the processing fee, each Journal Entry will credit the fundraiser's deposit account and debit the expense account selected below. If the donor pays the processing fee, each Journal Entry will debit the fundraiser's deposit account and credit the account specified.

The key clarification: “deposit account”

Campaign deposit account / sales receipt deposit account
= the Undeposited Funds or Clearing account you put on the Sales Receipt in QuickBooks

This is not the expense account.
It’s the temporary holding account representing what the payment processor owes you.

Common examples:

Undeposited Funds
Stripe Clearing
Donations Clearing

When the UI says:

“deposit account associated with the fundraiser”

it means:

“the same account you selected as the Deposit To account on the Sales Receipt”

Case-by-case logic check

Case 1: Organization pays the processing fee

What actually happens in real life

Donor gives $100

Processor takes $3

Bank receives $97

QuickBooks entries

1️⃣ Sales Receipt

Debit Undeposited Funds / Clearing 100 Credit Donation Revenue 100

2️⃣ Journal Entry for the fee

Debit Payment Processing Fees Expense 3 Credit Undeposited Funds / Clearing 3

Result:

Clearing account balance = 97

Matches bank deposit

Fees are properly expensed

Case 2: Donor pays the processing fee

What actually happens

Donor is charged $103

Organization receives $100

Processor keeps $3

QuickBooks entries

1️⃣ Sales Receipt

Debit Undeposited Funds / Clearing 103 Credit Donation Revenue 103

2️⃣ Journal Entry for the fee

Debit Undeposited Funds / Clearing 3 Credit Processing Fee Offset Account 3

This credit account is often:

“Processing Fee Reimbursement”

Or a contra-revenue account

Result:

Clearing account nets to 100

Revenue reflects the full donor charge

No expense recorded (because donor paid it)

✅ This logic is sound and consistent with GAAP practices.

Vendor selection (Stripe, PayPal, etc.)

QuickBooks likes:

Journal Entries tied to a Vendor

Especially when expenses are involved

Choosing “Stripe” or “PayPal” as the vendor:

Helps with reporting

Keeps accountants happy

Matches how many native integrations behave