How to Record an Online Donation Received via PayPal or Stripe Net of Platform Fees
Recording a website donation at gross amount with the payment platform fee as a separate fundraising expense.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Cash in Bank (Net) | Asset (+) | 97.00 | - |
| Payment Platform Fee | Expense (+) | 3.00 | - |
| Contributions Revenue (Unrestricted) | Revenue (+) | - | 100.00 |
💡 Accountant's Note
Gross donation is recognized as revenue. The processing fee is a fundraising expense. Recording only the net amount understates both revenue and expense.
Practitioner & Systems Framework
💻 ERP Architecture
Integrate the online giving platform with the CRM and ERP to automatically import donations at gross. Map the platform fee to Fundraising Expense — Payment Processing Fees. Reconcile monthly platform reports to the bank deposit and GL. The platform fee should be included in the fundraising cost-per-dollar-raised calculation.
⚠️ Audit Flags
Auditors verify gross revenue recognition by reconciling platform reports (showing gross donations) to the GL. Net-basis recording understates both revenue and expenses. Some auditors test this by comparing the platform's gross transaction report to the revenue recorded.
📄 Required Documentation
Online giving platform transaction report (gross donations, fees, net payout), bank settlement confirmation, monthly reconciliation of platform to GL, donor acknowledgment letters at gross amount, and fundraising cost analysis.
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Expert Analysis by Qusai Ahmad
General Accountant Supervisor & IFRS Specialist
Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.