What is a convenience fee?
A convenience fee is an add on fee at the bottom of your invoice, calculated as a flat percentage of the entire invoice total except sales tax.
Why should I charge a convenience fee?
Companies often charge a convenience fee to pass external business expenses to the customer in a transparent way. The most common form of convenience fee is for credit card processing fees, where a percentage of your invoice total is paid to the credit card company instead of your business.
It's also common for companies to waive card processing convenience fees for customers who use other payment methods.
Legal considerations for credit card processing convenience fees
Credit and debit card companies prefer to conceal their fees from your customers, and often lobby for local legislation to prevent you from disclosing card processing fees instead of hiding them by marking up your prices.
Therefore, credit and debit card convenience fee rules may vary by state, regulatory body or credit card network. Depending on your state, for example, you may be able to charge a convenience fee but prevented to tell customers it's the bank fee for their card transaction.
Detail Bookie provides you the mechanism to add convenience fees to your invoice, but can not be responsible for your choice to use or not use the feature, how you communicate about it to customers, or what percentage you charge.
Please touch base with your legal and tax professionals in your area for further guidance on weather and how convenience fees are permitted in your area and what legal requirements you may need to follow if you charge them.
Tax considerations for convenience fees
Generally, convenience fees are considered taxable income. We calculate the convenience fee before sales tax is added. That means we do not collect sales taxes on the convenience fee.
You should consider this when choosing what percentage rate to use for your fee. Please touch base with your legal and tax professionals for further guidance.
How do I set up automatic convenience fees?
From your backoffice main menu, navigate to:
Setup > Company Profile
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Convenience fees are calculated any time an invoice is created or modified in a way that causes it's sales tax and totals to be recalculated.
After setting a convenience fee, existing invoices will not have convenience fees added until something on the invoices changes. Invoices closed before you set up a convenience fee will not have the fee added.
How do I disable automatic convenience fees?
From your backoffice main menu, navigate to:
Setup > Company Profile
Update the convenience fee to 0 and click the save button.
How do I override the convenience fee on an invoice?
Use the edit line item button to view the edit form for the convenience fee line item.
Enter a custom amount to charge, or enter 0 to waive the convenience fee.
Use the delete invoice line button to reset the custom convenience fee back into an auto calculated fee.