Why Doesn't My Bank Deposit Match My Sales?
Business Owner Resource Library • 5-minute read
Have you ever looked at your bank account after a customer paid by credit card and wondered why the deposit was less than the amount of the sale?
You're not imagining things.
It's one of the most common questions business owners ask after they begin accepting credit card payments.
You charge a customer $500, but only $485 shows up in your bank account.
So where did the other $15 go?
In most cases, the answer is simple: your payment processor deducted its processing fee before depositing the remaining funds into your bank account.
Understanding what's happening behind the scenes can help you keep more accurate financial records and better understand your business's financial performance.
The Misconception
Many business owners think:
"If only $485 was deposited into my bank account, then I must have earned $485."
It seems logical.
After all, that's the amount you actually received.
But that's not what happened.
Your customer paid you the full $500.
The payment processor simply deducted its fee before sending the remaining balance to your bank account.
That processing fee isn't a reduction in your sales—it's a cost of accepting credit card payments.
The Reality
When a customer pays by credit card, there are actually two separate transactions taking place.
First, your business earns the full amount of the sale.
Second, the payment processor charges a fee for processing the transaction.
Although you receive a smaller deposit, you still earned the full amount your customer paid.
The processing fee is simply one of the costs of doing business, just like paying for internet service, software subscriptions, or office supplies.
Recording your sales and your credit card processing fees separately provides a clearer picture of your business's financial performance.
A Practical Example
Imagine you're a hairdresser and a client pays $200 for their appointment using a credit card.
Your payment processor charges a 2.9% processing fee, so only $194.20 is deposited into your bank account.
At first glance, it might look like your income was $194.20 because that's the amount that reached your bank account.
But that's not actually what happened.
Your client paid $200.
Your revenue (or income) is $200—not $194.20.
The $5.80 difference wasn't a reduction in your revenue. It was a credit card processing fee, which is a normal business expense.
When your accounting and bookkeeping reflect the full sale as revenue and the processing fee as an expense, your financial reports provide a more accurate picture of your business.
Why It Matters
If you record only the amount deposited into your bank account as income, your financial reports will understate your sales.
Over time, that difference can become significant.
Tracking your sales and credit card processing fees separately helps you:
Understand how much revenue your business actually generated.
See how much you're spending to accept credit card payments.
Better evaluate pricing and profitability.
Maintain more accurate financial records.
Good accounting and bookkeeping aren't just about recording deposits—they're about understanding what those deposits actually represent.
Key Takeaways
Your bank deposit may be less than your sale because your payment processor deducted its processing fee.
The full amount your customer paid represents your revenue.
Credit card processing fees are generally a normal operating expense—not a reduction in sales.
Separately tracking sales and processing fees provides more meaningful financial reports.
Understanding the difference helps you make better business decisions.
Important
Every business is different. This article is intended for general educational purposes and shouldn't be considered accounting or tax advice for your specific situation. If you have questions about how this topic applies to your business, I'd be happy to learn more during a no-obligation Discovery Call.
