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Bookkeeping with Resolve

Katya Oringer
  • Updated

If you are utilizing Advance Pay where you receive an early payment from Resolve, the journal entries are similar to issuing an invoice and accepting multiple payments on it.

  1. Create the invoice you are going to add to Resolve

  2. Record the advance (if any) you take from Resolve

  3. Record the payment (or non-payment) from your customer processed through Resolve

Along the way, you'll also record any fees charged by Resolve. Note that the ledger entries in this document are examples; additional entries will be required depending on your preferred basis of accounting.

 

Step 1: Create the invoice you are going to process with Resolve

Create an invoice in your accounting system, extending net terms to your customer and generating the following double-entry in your books:

 

Debit: Accounts Receivable
Credit: Revenue

 

Step 2: Record the advance (if any) you take from Resolve

When you receive a payout from Resolve, go to the Payouts sub-tab on the Payments tab to see an itemized breakdown of the payments, advances, and fees in each payout. (Click in to any payout to see details.)

 

Record your advance from Resolve as a payment on the invoice. Note that advances from Resolve are not loans.

 

Debit: Cash
Credit: Accounts Receivable

 

Note that Resolve also withholds a merchant discount rate from the advance. To account for this, you'll need an expense account called "financing expense" or similar.

 

Debit: Advance Fee
Credit: Cash

 

Step 3: Record the payment (or non-payment) from your customer processed through Resolve

If your customer pays, Resolve will pass through the balance owed to you. Record this as another payment on your invoice.

 

Debit: Cash
Credit: Accounts Receivable

 

At the end of the month, Resolve charges payment processing fees, so you'll also need an account for that if you don't have one already.

 

Debit: Payment Processing Fee
Credit: Cash

 

If your customer doesn't pay, you'll need to record a bad debt expense.

 

Debit: Bad Debt Expense
Credit: Accounts Receivable

 

Let's work through an example!

You issue a $100 invoice to your customer on Net 30 terms.

 

Step 1: Create the invoice you are going to add to Resolve

Debit: Accounts Receivable for $100
Credit: Revenue for $100


Your customer is approved for a 25% advance rate from Resolve, and your MDR for Net 30 is 2.75%.

 

Step 2: Record the advance you take from Resolve

Debit: Cash for $25
Credit: Accounts Receivable for $25

 

And for the financing fee of 2.75% on $25 advance.

Debit: Advance Fee for $0.69
Credit: Cash for $0.69

 

Finally, your customer pays via ACH and Resolve passes through what you are owed.

 

Step 3: Record the payment from your customer processed through Resolve

Debit: Cash for $75
Credit: Accounts Receivable for $75

 

At the end of the month, Resolve will charge you $1 for receiving the ACH...

Debit: Payment Processing Fees for $1
Credit: Cash for $1

 

 

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