Credit Card Machines

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT member discussion
Morning everyone

Where does everyone else put the cost of credit card machines in people's accounts? I have always put in with other expenditure, but am now thinking that perhaps it should be a cost of sales.

I know that it doesn't make any difference at the end of the day, but it has got me thinking....

Claudia

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Credit Card Machines

    Hi Claudia

    The company (pub management) I work for put credit card costs under expenditure, though I guess it would depend on type of business ie: if the business is retail then it could go under cost of sales?

    Just to add to your thoughts :roll:

    Sharon
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Credit Card Machines


    I put it in overheads with other financial costs (but shown separately).

    Helen
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Credit Card Machines

    Thanks you gals - I will keep it where it is then, as that seems to be the general view.

    Claudia
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Credit Card Machines

    I always put it in "other finance costs".
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Credit Card Machines

    Not that I belong on this forum, but as an indirect cost, we post these as "Credit card charges" under our overheads.

    Although we're a manufacturer, I can't really think of an example where they would be classified under cost of sales - even in the retail industry - unless you have a separate machine for each customer!

    Robert
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Credit Card Machines


    Quite agree. Surely the charges are the same as for processing any payment i.e. cheques?

    Helen
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Credit Card Machines

    I agree with everyones treatment above and would indeed do the same.

    However, conceptually, the card charges (and even cheque charges for that matter) can indeed be directly related to each and every sale (unless you are on a flat fee), so could (and perhaps should) be included as a direct cost of sale. You certainly wouldn't need a separate machine for each customer.

    The choice is yours!


  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Credit Card Machines

    Have now been pondering over this for the last couple of hours with arguments both for and against whether it is a direct cost of sale - quite distracting since I should be revising for my exam on Thursday - especially after having just read Dean's comments!

    Since they can be directly linked to revenue, I can now see the logic for including them in the cost of sales rather than thrown in amongst the general overheads. I guess it's just one of those things we've never put much thought into until now!

    As such I'm now sitting firmly on the fence with this one and staying away from here for now!!! :lol:

    Thanks Claudia - the seeds of doubt have now been sown! :roll:

    Robert
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Credit Card Machines

    A pleasure Robert :lol:

    It had never occurred to me until I was doing a set of accounts for shop that sells computers and the costs were very high, and it got me a thinking....

    Good luck for the exam by the way.

    Claudia
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Credit Card Machines


    Are there any travel agents out there?

    They usually quote a surcharge for using credit cards, wonder how their accountants deal with the cost?

    Helen

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