[Question] Processing Yoco Card Transactions in Pastel

[Ola]

Hi Guys,

Please assist...

We used to use a Capitec Card Machine for card payments. The client's card was swiped, and 2 days later the funds appeared in our bank account. I then allocate this payment straight to the client's account as a payment. At the end of the month, the fees and commissions were deducted once off for the transactions done that month, which I used to capture against the relevant expense account.

We have however cancelled the Capitec Card Machine, and acquired a new Yoco card machine. Yoco deducts their fee off every transaction BEFORE the payout. (For example, the client swipes for R2500.00, and R2415.19 is transferred to our account 2 days later.

If I allocate the R2415.19 to the client's account as a payment, there will obviously be a R84.81 balance.

What would be the right way to capture the above?

[Neville Bailey]

I would capture the R2500.00 in the cashbook receipts journal and allocate it to the customer account. Then capture the R84.81 as a negative amount in the cashbook receipts journal (using the same reference), and allocate it to the relevant expense account.

By doing it as above, the common reference will consolidate the two entries into a single receipt amount of R2415.19 when you do your bank reconciliation, and when you run your cashbook detailed ledger, so that it corresponds to what you see on your bank statement.

[Ola]

Hi Neville,

Always happy to see your name in a thread, because I know your answer is always the solution

Thank you so much!

[Xplosiv]

Would this work the same way in Sage?

[Ola]

Neville,

Sorry, will the VAT still work out correctly when I select the appropriate tax type when capturing the R84.81 as a negative?

[Neville Bailey]

Neville,

Sorry, will the VAT still work out correctly when I select the appropriate tax type when capturing the R84.81 as a negative?

Good question - I haven't tested it, but it's possible that the VAT in the R84.81 amount might reflect as a negative output tax. Perhaps you should rather capture that amount as a cashbook payments entry, but still use the same reference as the net R2,500.00 amount. Then you can be sure that the VAT will reflect as a positive input tax.

[HJVW]

Yoco

I would capture the R2500.00 in the cashbook receipts journal and allocate it to the customer account. Then capture the R84.81 as a negative amount in the cashbook receipts journal (using the same reference), and allocate it to the relevant expense account.

By doing it as above, the common reference will consolidate the two entries into a single receipt amount of R2415.19 when you do your bank reconciliation, and when you run your cashbook detailed ledger, so that it corresponds to what you see on your bank statement.

How do yoco calculate the R84.81 as an excel formulation? For example The invoice amount being R2208. The amount on the bank statement is R2135.64.

[Alec Candiotes]

Hi Ola

What a fantastic question. I have been mulling over this transaction, what data flows and how to account for it the entire evening.

In my view your debtor is YOCO. They collect cash from your cash customer at the point of sale. So when cash is received from YOCO through your cash book receipts it should be allocated to YOCO, not the cash customer he/she already paid and for that reason is not a debtor to start with. I have made an illustration below to show how there are 4 transactions in my view.



I am currently thinking how I can illustrate to you how to capture the transaction quickly in Pastel. I am almost there and will share it asap.

I do think it is very important to see the transactions as they really happen, because this will help sort out your receipting process.

I hope this has assisted. I will post soon post how to use Pastel to quickly post this.

All the best,
Alec Candiotes CA(SA), MCom Taxation

[Andromeda]

Hi Alec

I have been checking with some clients and some treat this in a very strange way.

The correct treatment (in my opinion anyway), although I don't know how you would do it in Pastel, is that the original sale is the equivalent of a cash sale, because you have no further claim against the original customer.

The "cash on hand" account .... I can't really decide if it is a cash equivalent or a debtor but I lean towards cash equivalent. That account credits the linked account the next day, less a fee. Personally I treat the fee as a bank charge. Perhaps it is a commission?

It is not a quantum leap from the old credit card clearing mechanisms, just faster and mostly cheaper.

[HJVW]

Alec,

Hi Ola

What a fantastic question. I have been mulling over this transaction, what data flows and how to account for it the entire evening.

In my view your debtor is YOCO. They collect cash from your cash customer at the point of sale. So when cash is received from YOCO through your cash book receipts it should be allocated to YOCO, not the cash customer he/she already paid and for that reason is not a debtor to start with. I have made a illustration below to show how there are 4 transactions in my view.

[ATTACH=CONFIG]7633[/ATTACH]

I am currently thinking how I can illustrate to you how to capture the transaction quickly in Pastel. I am almost there and will share it asap.

I do think it is very important to see the transactions as they really happen, because this will help sort out your receipting process.

I hope this has assisted. I will post soon post how to use Pastel to quickly post this.

All the best,
Alec Candiotes CA(SA), MCom Taxation

How is the yoco commission/charge calculated? Do they take the sale amount x their commission, + Vat?

[Alec Candiotes]

Thanks Andromeda

You are so right, it is not a quantum leap forward. For me it is important to see the entire transaction and to then setup your structure and Pastel in such a way that it reflects it.

I have gone further and also made the following illustration of the transaction as it happens.



I really appreciate us all having this conversation as I do believe YOCO is a fast and inexpensive solution for SME's. But the standard Pastel processing method is not fast and cost efficient, so we need to see how we can set processes in place to make it quick to capture in Pastel.

[Alec Candiotes]

Hi Guys.

I sat with my team and we created a 3 step procedure how we think you can capture YOCO transactions in Pastel quickly. I loaded the video on a LinkedIn post here:

https://www.linkedin.com/posts/alec-candiotes-ca-sa-mcom-tax-3180ba21_we-had-such-an-awesome-question-today-how-activity-6575673147943645184-hst4

I am sorry for not posting the video here, but I am not able to upload a video in this post.

Would love to hear your opinion on it.

Kindest regards,
Alec

[Alec Candiotes]

Hi HJVW

The fee calculation as far as I can see from their website is 2.95% x 1.15 of the total cash paid.

It unfortunately is not always an exact science as different ERP systems have different decimals after the zero.

Hope this helps.

All the best.

Alec Candiotes

[Ola]

Hi Guys,

Thank you for all of your responses.

Unfortunately I cannot properly see the video you posted Alec, however I really appreciate your guys' input on this. The way I'm currently capturing this is extremely confusing and tedious. There MUST be an easier way!

I'm using Pastel Accounting Xpress V17, and here's what I ended up doing:

As YOCO sends me an invoice at the end of every month for all of the fees deducted, I ended up creating a supplier account for YOCO.

When capturing my bank statements, I allocate every YOCO settlement to the respective customer account, using the FULL AMOUNT invoiced to the customer. For instance: If the settlement amount is R2415.19, and the original amount swiped was R2500.00, I capture R2500.00. This way, the customer account balances to R0.00.

Then, using the same reference number (still on the receipts side), I capture the YOCO fee as a negative right below it (-R84.81), allocating it to the relevant expense account. (This also means I constantly need to reference back to the online portal or mobile app, to confirm the fee amount for each specific settlement/transaction).

Ultimately, the transaction reflects as a consolidated entry of R2415.19 (R2500.00 - R84.81) in my cash book, which corresponds with my bank statement. At the same time, the supplier account is debited with R84.81. When capturing the YOCO invoice at the end of the month, I allocate all the relevant fees to this invoice, which also enables me to cross check and ensure every transaction & fee is accounted for, as the total fees should = the total of the invoice.

This was the only way I could be sure that VAT would be accounted for in the correct way. What are your thoughts on this?

[Kevin Smith]

Hi Ola

Have you considered creating a separate cashbook to record the YOCO entries in? Receipt the full R2500 from the customer into YOCO receipts. Then use the cashbook transfer wizard and do a cashbook transfer to the current account from YOCO receipts for the value less the fees. Raise the supplier invoice from YOCO as a 1 line entry to bank charges including VAT at month end. "Pay" the YOCO supplier at month end from the YOCO cashbook. The balance in the YOCO cashbook will be equal to the value on their invoice, if all entries were captured correctly. You will have a separate cashbook to trace all the YOCO entries in and can do a bank recon on their transactions, and your current account won't have all the consolidated entries to work through during the recon process.

It doesn't really decrease the processing required, but might make reconciling the account easier.