# Card payments and processor payouts

> A card payment applied in full, the processor's fee as an expense, and the payout through a clearing account that has to come back to zero.

Source: https://lopifi.com/learn/cash-application-explained/card-payments-and-processor-payouts
Part of: Lopifi — US GAAP books on autopilot, checked by a CPA (https://lopifi.com)

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**How do I record a Stripe payout that arrives net of fees?** A card payment applied in full, the processor's fee as an expense, and the payout through a clearing account that has to come back to zero.

Alder paid INV-1008, $4,000, by card through Northwind's processor. The processor's fee at an assumed 2.9% + 30¢ a charge is $116.30, so the [Payout](https://lopifi.com/md/glossary/payout) that reached the bank was $3,883.70. Record the invoice as paid in full, because Alder paid in full, and book the fee as an expense. Some processors also hold back a [reserve](https://lopifi.com/md/glossary/processor-reserve) against future chargebacks; that's still Northwind's money, owed by the processor, and not cash until it's released. A [clearing account](https://lopifi.com/md/glossary/clearing-account) (1050, new to Northwind's chart, beside 6700 Merchant fees) stands in for the processor balance and has to come back to zero.

*[Figure: stripe payout]*

Alder's $4,000 charge, the $116.30 fee, and the $3,883.70 payout.

**Wrong:** Apply 3,883.70 to the invoice and leave 116.30 open, or write it off.

**Right:** Apply 4,000 to the invoice; 116.30 to merchant fees; 3,883.70 to cash. Clearing nets to zero.

Booking the payout as the receipt understates both the payment and the cost of taking it, leaves the invoice open by the fee, and won't tie to the processor's report or to Form 1099-K.

**Card**
- Pro: Paid on the spot
- Pro: No bank details to send
- Con: About 2.9% + 30¢ a charge at one processor's standard rate
- Con: Cardholders can file chargebacks
- Best for: Self-serve and small invoices

**ACH**
- Pro: Cheap: one processor charges 0.8% capped at $5 for ACH debit
- Pro: Easy to automate
- Con: A day or more to settle
- Con: Some returns allowed after the fact
- Best for: Recurring B2B invoices

**Check**
- Pro: No processing fee
- Con: Slow, and often arrives without remittance
- Con: Someone has to deposit it
- Best for: Customers who insist

How customers pay, from the receiving side.

## Where this page's rules come from

- [Stripe — Pricing](https://stripe.com/pricing) — One processor's published US card rate (reference)

## Read further

- https://lopifi.com/md/journal-entries/stripe-payout
- https://lopifi.com/md/startups/invoicing-and-reconciling-card-and-ach-payments
- https://lopifi.com/md/startups/reconcile-stripe-payouts
- https://lopifi.com/md/accounting/chargebacks

- **Track:** [Accounts receivable](https://lopifi.com/md/learn/ar)
- **Part of:** [Cash application: matching payments to invoices](https://lopifi.com/md/learn/cash-application-explained) — 6 min
- **Terms taught:** [Payout](https://lopifi.com/md/glossary/payout), [Clearing account](https://lopifi.com/md/glossary/clearing-account), [Chargeback](https://lopifi.com/md/glossary/chargeback), [Processor reserve](https://lopifi.com/md/glossary/processor-reserve), [ACH](https://lopifi.com/md/glossary/ach)
- **Previous:** [Cash application: matching payments to invoices](https://lopifi.com/md/learn/cash-application-explained)
- **Next:** [The AR aging report, AR · Lesson 7](https://lopifi.com/md/learn/ar-aging-report-dso-cei)
- **The course:** https://lopifi.com/md/learn