What is the entry for processing fee collected and deposited

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Srimannarayana (Querist)
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05 June 2015 What is the entry for Collecting Processing fee(Income) through DD from Customer Service Point and deposited into bank

Amol S Joglekar

Amol S Joglekar (Expert)
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05 June 2015 The kind of agreement between you and Customer point is crucial in this regard.

Normally the entry would be
(Assuming the entry is passed when invoice is raised in the name of customer)
Debit : Customer Service Point
Credit : Debtors account (From whom dd is recd)

Debit: Bank account
Credit : Customer Service Point

If you are paying any commission to CSP, the same can be incorporated in the second entry.

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Srimannarayana

Srimannarayana (Querist)
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05 June 2015 Thanks for your Quick Reply sir

Amol S Joglekar

Amol S Joglekar (Expert)
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05 June 2015 you are most welcome.
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Srimannarayana

Srimannarayana (Querist)
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05 June 2015 Sir Can I write like this
Debit :Processing Fee from CSP(Direct Income) A/c
Credit: Customer Service Point A/c(Debtors)

At the time of Deposit money

Debit : Bank A/c Dr
Credit : Processing Fee from CSP

Amol S Joglekar

Amol S Joglekar (Expert)
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05 June 2015 No, it wont give a correct view.

See....my assumption is...when bills/invoices are raised, the revenue entry is already passed in the books. e.g. in the cases of electricity companies, credit card companies, mobile companies.

In your case what is the situation?

Srimannarayana

Srimannarayana (Querist)
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05 June 2015 My Company is doing Business Like e-Seva e-Governance. we appoint Village Level Enterprenures to give nativity certificates,Death,Birth Certificates and some revenue dept certificates for that services they will collect Rs.10 or Rs.15 but we collect from VLE a some of Processing Fee only. this is the nature of business.

Amol S Joglekar

Amol S Joglekar (Expert)
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05 June 2015 In that case, what you suggested would be fine with following modification.

Debit : CSP i.e. VLE
Credit : Processing fee (Direct Income)

and then, when money is deposited

Debit : Bank Account
Credit : CSP i.e. VLE (from whom the dd is received)

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