GiveaLittle, Stripe, PayPal and the likes
There are many suppliers out there offering to make life easy for you by giving users online payment options, sometimes combined with other services, such as event registrations.
In return you are being charged a commission which is usually deducted before the money is transferred to you. Bookkeepers have a tendency to ignore those commissions or fees, and just code the net amount to the appropriate income account.
Those fees can be significant, however. GiveaLittle, a facility to accept online donations maintained by telecommunications giant Spark, charges 5% of the transaction value, for example. Many sports clubs and others use Stripe, Debitsuccess or others to manage registrations and accept payment, and commissions and fees from those providers usually add up to hundreds of dollars.
Where it is significant, it is important to show this expense, because you are also artificially reducing your income. For example, one sports club has been wondering why their membership takings went down after switching to an online payment facility – it hadn’t, they just hadn’t separated out the commission.
In case of donations, GST is usually claimable on the fees (while no GST is payable on the donation), reducing the pain a little – but only if you separate the fee out.
PayPal is a frequently used online facility, which allows you to accept credit or debit card payments without having to provide such a facility yourself. It is essentially a bank account, and should be treated as such: people make payments into a PayPal account held by you, they charge fees, and you can transfer money out of (or into) the PayPal account whenever you want. You can also use PayPal yourself to make payments, which means it is important for an organisation to have an eye on who is authorised to do so, as it circumvents any two-signatory rules.
If you have accounting software with bank feed capability, you can connect your PayPal account as a bank feed, and code transactions as you would in any other account. PayPal fees are not GST deductible (overseas supplier), while the money you collect probably is, which makes it important to keep them separate.