Reconciling esenda Payments Settled Net of Fees

This guide explains how to account for payments collected through esenda where settlements are paid to your bank account net of esenda processing fees.

esenda settlements are made net of fees. This means that the amount received into your bank account will be lower than the total amount paid by parents, customers, or payers.

Please note, VAT postings have been excluded from this guide for simplicity.

For example:

Although only £980.00 appears in your bank account, the customer has paid £1,000.00. The customer invoice should therefore be cleared in full, and the £20.00 esenda processing fee should be recorded separately as a cost.

The recommended way to manage this is to use an esenda clearing account.

Recommended Accounting Setup

Create a new bank, cashbook, or control account in your accounting system called something like:

esenda Payments Clearing Account

This is not a real bank account. It represents funds collected through esenda before they are settled to your actual bank account.

The clearing account is used to record:

The aim is for the esenda clearing account to reconcile once all gross receipts, net settlements, refunds, chargebacks, and esenda processing fees have been posted.

Recommended Workflow

Step 1: Record gross customer payments

When esenda provides a breakdown of payments collected, post the gross payment amount against the relevant customer, parent, or debtor invoice.

For example, if a parent pays an invoice for £1,000.00:

This clears the customer invoice in full.

This is important because the customer paid the full invoice amount, even though the amount settled to your bank is lower after esenda processing fees have been deducted.

Step 2: Record the net bank settlement

When the settlement is received into your real bank account, post a transfer from the esenda clearing account to your bank account.

For example, if £980.00 is received into your bank account:

You can then reconcile the £980.00 receipt in your bank account against this settlement transfer.

Step 3: Record esenda processing fees

esenda processing fees should be recorded as a cost in your accounting system.

Where esenda issues a monthly invoice for processing fees, we recommend entering this as a supplier invoice at the end of the month.

For example, if esenda processing fees for the month total £20.00:

The invoice should then be marked as paid or allocated from the esenda Payments Clearing Account, rather than from your main bank account.

This reflects the fact that the fees have already been deducted from settlements before the money reached your bank account.

Important Note About Month-End Fees

During the month, the esenda clearing account may not balance to zero after each settlement.

This is expected if esenda processing fees have been deducted from settlements but the monthly esenda fee invoice has not yet been posted.

For example:

Once the monthly esenda processing fee invoice is posted and allocated through the esenda clearing account, the balance should clear.

Worked Example

A batch of payments is processed through esenda.

1. Gross receipts

The customer invoices are now cleared.

2. Net settlement

The bank receipt can now be reconciled.

3. Monthly esenda processing fee invoice

At month-end, the esenda processing fee invoice is entered and allocated through the esenda clearing account.

Then the invoice is marked as paid from the esenda clearing account:

Final position

Summary

For payments collected through esenda:

1. Gross payments should clear customer invoices.
2. Settlements will be received into your bank net of esenda processing fees.
3. esenda processing fees should be recorded as a cost.
4. The monthly esenda fee invoice can be posted and allocated through the esenda clearing account.
5. The esenda clearing account ties the gross receipts, net settlements, and processing fees together.

This approach avoids underpaying customer invoices, keeps the main bank reconciliation simple, and provides a clear audit trail for esenda settlements and processing fees.