Credit card processing statements are infamous for unintelligible TLAs (Three letter acronyms), hidden fees and a host of other line items designed to befuddle even the most thorough examiners. At Gravity Legal we've designed our processing statements to try and do away with the confusion and provide information that can help you actually reduce your processing costs. We've consolidated the most important information down to one single page. In this article, we go through the key elements of the statement and how you can use the information.
Section 1: The Summary
In this section you will find a summary of fees charged in the processing period listed in the upper righthand corner.
Payment Volume: This is the total amount your firm processed across all of your accounts (trust and operating), and through all of your payment methods (credit/debit and ACH).
Total Fees: This is the total fees charged during the statement period. If you are using our surcharging program, then this will include any fees charged to clients.
Fees Paid by Clients: If you are using our surcharging program, this is the total amount of fees that clients paid to offset the cost of processing.
Net Fees: This is the total fees minus any fees paid by clients.
Effective Rate: This is your net fess (the fees actually covered by your firm), divided by the total payment volume. This is an important number to review, as it shows the actual cost to your firm of processing payments electronically.
Section 2: Processing Details
In this section you will find a breakdown of volume and fees both by deposit bank account (trust and operating), as well as by payment method (credit/debit and ACH). The definitions of the columns are the same as those listed above in the summary section.
Section 3: Key Metrics
In this section, you will find key metrics that will help you track actions impacting your cost of processing and how quickly you are getting paid.
Percent of Volume on ACH: This is the payment volume processed on ACH divided by the total volume processed on both ACH and credit/debit. A higher percentage will typically reduce your processing costs.
Average Transaction Size: This is the total payment volume divided by the number of transactions.
Average Payment Time: This is the average time a dollar is outstanding. Note that we treat payments processed on standing links, on stored payment methods and on subscriptions as immediate payments. If you do not see this on your statement yet, you will see it once we have enough data.
Effective Rate: This is the same number that is also listed in the summary section.
Section 4: Debits
In this section, you will see a list of the debits from your bank account. The credit/debit card fees for all of your activity will be deducted from the operating account. The ACH fees for all of your activity will be deducted from the operating account separately. The numbers on the statement should match what you are seeing on your bank statement, and they should add up to the Total Fees listed in the summary section. Typically, fees from the month are deducted in the first week of the following month.