The giving platform says the church received $4,210 last week. The bank shows three deposits that add up to something less, on different days, and none of them matches a Sunday. If you have tried to enter those in the books and given up, the problem is not your arithmetic. Online giving arrives in a shape the bank statement does not explain, and it needs a routine of its own.
Three records that have to agree
- The giving record. Who gave, how much, on what date, to which fund.
- The books. Contribution income by fund, and processing fees as an expense.
- The bank. The cash that actually arrived.
The document that connects them is the platform's payout report, sometimes called a deposit or settlement report. It lists, for each transfer to the bank, the gifts included, the fees deducted and the net amount. Work from that report, not from the dashboard totals.
Record the gross gift and the fee separately
Take a plainly made-up example. Ten givers give $100 each online, $700 to the general fund and $300 to missions. The platform keeps $30 in fees and sends $970 to the bank. The entry is:
- Contribution income, general fund: $700
- Contribution income, missions fund: $300
- Processing fees expense: $30
- Deposit to the bank: $970
Recording only the $970 would understate giving by $30, leave the givers' statements $30 higher than the books, and hide what the platform costs. Decide once, as a matter of policy, which fund bears the fee expense. Some churches charge all fees to the general fund so a restricted gift reaches its fund in full; that is the board's decision to make and write down.
Payout batches and timing
A payout is a batch. One deposit may hold gifts from several days, a mix of card and bank-account gifts, and several funds. Card gifts and bank-account gifts often settle on different schedules, and each platform sets its own, so read your platform's documentation instead of assuming.
A clearing account keeps this manageable. Record each day's or each batch's gifts into an asset account named something like "Online giving clearing", then record each payout as a transfer from clearing to the bank, with the fee. After every payout has arrived, the clearing balance should equal only the gifts not yet paid out. A balance that will not clear points to a missing entry. The software steps are in setting up QuickBooks for church fund accounting.
When the donor covers the fee
Many platforms let a giver add an amount to offset the fee. If a giver chooses to pay $103 so the church nets about $100, the giver paid the church $103. Record $103 as the gift on the giver's record and in contribution income, and record the fee as an expense as usual. Check how your platform exports this: some show the added amount in a separate column, and it is easy to drop.
Refunds, returned payments and chargebacks
- Refund. A giver typed $1,000 instead of $100 and asks for a correction. Reverse the original gift and record the correct one.
- Returned bank payment. A bank-account gift fails after it was reported. Reverse the gift, and record any return fee as an expense.
- Chargeback. A cardholder disputes a charge with their card issuer. The platform withdraws the amount, often with a dispute fee.
In each case, reduce contribution income in the same fund and correct the giver's record, so the gift does not appear on a statement. Platforms usually net these against a later payout, which is one more reason to work from the payout report.
The year-end cut-off
The date of the gift decides which year's statement it belongs on, and the date the money reached the bank does not. IRS Publication 526 says contributions charged on a bank credit card are deductible in the year the charge is made, and that contributions made by text message are deductible in the year the text is sent if the contribution is charged to the giver's telephone or wireless account. So a credit card gift charged on December 31 is a gift of that year even when the payout lands in January.
In practice:
- Use the platform's transaction date, not the payout date, on giving records.
- Record gifts made in December but paid out in January as December income, sitting in the clearing account at year end.
- Check which time zone the platform uses for its dates, since a gift made late on December 31 can be stamped January 1.
- For any gift where the date is unclear, the question of what the giver may deduct belongs with the giver's own tax preparer.
A monthly matching routine
- Download the payout report for the month.
- Match each payout to a bank deposit, to the cent.
- Compare gross gifts by fund on the platform to contribution income by fund in the books.
- Compare total fees on the platform to processing fees expense.
- Confirm the clearing account balance equals the gifts not yet paid out.
- Compare the platform's total to the giving records, if those are kept in a separate system.
Done monthly, this takes minutes and keeps January simple; see what belongs on a year-end contribution statement and the month-end checklist for church books. For help keeping giving records, deposits and the books in agreement, see giving records and contribution statements.
