Separate your PayNow Surcharge

This update gives you cleaner accounting and better control over how payment processing fees appear in your books. Keep your revenue reporting crystal clear, while the system handles the complexity automatically.

 

What's New: Separate Surcharge Invoices

When customers pay invoices using PayNow, you can now choose to record the processing fee as a separate, linked invoice instead of adding it as a line item.

This means:

• Your original invoice shows only the services or products you provided

• Processing fees are isolated in their own invoice for cleaner accounting

• Both invoices are automatically linked and sync to your accounting system

• Everything happens behind the scenes — your customers see no difference

In short: better accounting organisation without changing how your customers pay.

 

Clean separation between revenue and processing costs

One of the most common frustrations when tracking business performance is:

"How much did I actually earn versus how much went to payment processing?"

With this feature, processing fees are saved in a separate invoice, so there's far less confusion when reviewing your accounts or generating reports.

The result? Revenue figures that stay clean, with instant visibility into processing costs.

 

Configure your own account codes and tax treatment

Processing fees often need to be recorded differently from service revenue in your accounting system.

Sometimes you need processing fees to:

• Go to a different account code (like "Bank Charges" or "Merchant Fees")

• Use a different tax treatment

• Appear separately in financial reports

Now, when using separate surcharge invoices, you can configure exactly how these fees are categorised.

This makes reconciliation more accurate, particularly for businesses with Xero integration or detailed accounting requirements.

 

Your customers see no difference

If you're worried about customers being confused by "two invoices," here's what actually happens:

The payment screen shows one total amount.

Even though two invoices are created in your system, the customer only sees one payment screen with the full amount (including processing fee).

This keeps the experience professional and eliminates any risk of confusion.

 

How it works

Standard Approach (Default)

When a customer pays a $1,000 invoice:

• • Processing fee (1.7% = $17) is added as a line item on the invoice

  • Customer pays $1,017 total

  • Single invoice syncs to your accounting system

 

With Separate Surcharge Enabled

When a customer pays the same $1,000 invoice:

• • Original invoice remains $1,000 (services only)

  • Second invoice automatically created for the $17 processing fee

  • Customer still pays $1,017 total on one payment screen

  • Both invoices sync to your accounting system as linked records

  • Both marked as paid automatically

The customer experience is identical - the organisation happens in your accounting.

 

Linked invoices that stay organised

This update isn't just about splitting the fee into another invoice.

It works as a true linked connection between your original invoice and the processing cost:

• • Both invoices are automatically created and marked as paid

  • The surcharge invoice is clearly labelled (e.g., "#1234 / surcharge-[timestamp]")

  • All records sync to your accounting system

  • Everything is linked to the same transaction

This keeps your invoice management organised and structured, even as your payment volume scales.

 

How to enable this feature

What you'll need

Before you start:

• • PayNow must be enabled on your account

  • Stripe connection must be configured

  • An account code set up for processing fees (recommended)

 

Step-by-step setup

1. Go to Invoice Settings

Log into the Formitize Portal → Settings → Accounts → Invoices tab

2. Configure PayNow Settings

Scroll to the PayNow section and set:

• • Enable PayNow: Yes

  • Pass on surcharge to customer: Yes

  • Processing fee percentage: Set your rate (typically 1.7%–2.9% depending on currency)

3. Set Your Processing Fee Account Details

• • Fee Account Code: Choose where processing fees are recorded (e.g., "Bank Charges" or "Merchant Fees")

  • Fee Tax Rate: Select the tax rate for processing fees (consult your accountant if unsure)

4. Enable Separate Surcharge Invoices

• • Add processing fee as a separate invoice: Set to Yes

5. Save

Click Save at the bottom of the page.

 

Test it out

After enabling:

1. 1. Create a small test invoice

   2. Make a test payment using PayNow

   3. Check your invoice list — you should see both the original invoice and a linked surcharge invoice (format: "#1234 / surcharge-[timestamp]")

   4. Both should be marked as paid and synced to your accounting system

 

Why we built this

We know that the best accounting features:

• • Remove confusion from financial reporting

  • Support flexible accounting requirements

  • Work seamlessly without adding admin burden

  • Scale as your business grows

Separate Surcharge Invoices are another step toward making Formitize feel less like software, and more like a system that understands how your business actually runs.

 

What you'll see after a payment

In Your Invoice List:

• • Original invoice (marked as paid)

  • Linked surcharge invoice appears with format: "#1234 / surcharge-[timestamp]"

  • Both clearly linked to the same transaction

In Your Accounting System (e.g., Xero):

• • Both invoices sync automatically

  • Processing fee uses your configured account code

  • Tax calculated based on your configured rate

Important: The customer only sees one payment screen. The split into two invoices happens automatically in your system.

 

Switching between modes

You can turn this feature on or off at any time in your settings.

Changes only affect new payments — existing invoices stay as they are. No migration or conversion needed.

 

Who benefits most from this feature?

This feature is particularly valuable if your business:

• • Regularly reviews profit margins or revenue performance

  • Needs processing fees categorised separately in accounting reports

  • Uses Xero or another accounting system with specific account codes

  • Wants clear audit trails for financial reconciliation

  • Sends invoices to customers using PayNow and values professional presentation

 

Available now

Separate Surcharge Invoices are available now for all customers with PayNow enabled.

Start using cleaner accounting today and see how much simpler your reconciliation process can be.

 

 

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Troubleshooting 

The "Add processing fee as a separate invoice" option is greyed out

Make sure both "Enable PayNow" and "Pass on surcharge to customer" are set to Yes, then save and refresh the page.

 

I enabled the feature but the surcharge invoice didn't appear

The feature only applies to new payments made after you enable it. Payments made before activation will keep the original line-item format.

 

The surcharge invoice is using the wrong account code

Go to Settings → Accounts → Invoices → PayNow section and set the "Fee Account Code" to the correct account, then save. This only affects new invoices going forward.

 

The surcharge invoice isn't syncing to Xero

Make sure the processing fee account code exists in your Xero chart of accounts. If it doesn't, add it in Xero, then trigger a re-sync or wait for the automatic sync.

 

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FAQs

What are Separate Surcharge Invoices?

Separate Surcharge Invoices allow you to split the payment processing fee from your main invoice into its own dedicated invoice.

Instead of adding the fee as a line item, the system automatically creates a second, linked invoice when a customer pays.

 

Why would I use this feature?

This feature is ideal for:

• • Keeping revenue figures separate from processing costs

  • Meeting specific accounting requirements for categorisation

  • Using different account codes or tax rates for processing fees

  • Maintaining clean financial reports

  • Supporting audit and reconciliation processes

If you've ever thought "I need to separate these processing fees from my revenue" — this feature solves that.

 

Which invoices does this apply to?

This feature applies to any invoice paid using PayNow where you have:

• • PayNow enabled

  • Surcharge pass-through enabled

  • Separate surcharge invoices enabled in settings

It works automatically whenever a customer makes a payment.

 

Will my customers be confused by receiving two invoices?

No. Customers see a single payment screen with one total amount. The split into two invoices happens automatically in your system — they won't notice any difference.

 

How do I enable this feature?

Enabling the feature is straightforward:

1. 1. Go to Settings → Accounts → Invoices tab

   2. Scroll to the PayNow section

   3. Enable PayNow and surcharge pass-through

   4. Set your processing fee account code and tax rate

   5. Set "Add processing fee as a separate invoice" to Yes

   6. Save

That's it! The feature is ready to use on new payments.

 

What information is included in the surcharge invoice?

The surcharge invoice includes:

• • Processing fee amount (calculated as a percentage of the payment)

  • Tax (based on your configured tax rate)

  • Link to the original invoice

  • Payment reference

  • Account code (from your settings)

The invoice is automatically created, paid, and synced to your accounting system.

 

Can I switch back to the standard approach if I change my mind?

Yes — you can turn this feature on or off at any time in Settings → Accounts → Invoices → PayNow.

Changes only affect new payments; existing invoices stay as they are.

There's no data migration or conversion needed when switching between modes.

 

What happens if a customer makes a partial payment?

The processing fee is calculated on the amount being paid, not the full invoice amount.

For example, a $500 partial payment on a $1,000 invoice with 1.7% fee creates:

• • $500 payment on original invoice

  • $8.50 surcharge invoice

  • Total charged: $508.50

If they later pay the remaining $500, another surcharge invoice is created for that payment.

 

Will this create a lot of extra invoices in my system?

Technically yes; each payment creates two invoices instead of one.

However, surcharge invoices are:

• • Auto-generated and auto-paid

  • Clearly labelled ("#1234 / surcharge-[timestamp]")

  • Require no manual management

Most users find the accounting clarity worth the slight increase in invoice count.

 

Can I manually edit or delete the surcharge invoice?

We strongly recommend against it.

Surcharge invoices are linked to payment transactions and accounting records. Editing them could cause reconciliation issues.

If something looks wrong, contact Formitize support for assistance.

 

Will changing this setting affect existing invoices?

No.

The setting only applies when new payments are made. Any invoice already created or paid will remain unchanged.

 

Can my team use this feature?

Yes.

The feature is account-wide; once enabled, it applies automatically to all PayNow payments.

This ensures:

• • Consistent accounting treatment

  • No manual decisions for staff

  • Reduced errors

  • Simplified workflows

 

Can I use different account codes for different types of invoices?

Currently, the account code is set globally in your PayNow settings and applies to all surcharge invoices.

If you need different treatment for different invoice types, contact Formitize support to discuss your requirements.

 

Does this work with my accounting integration?

Yes.

Separate surcharge invoices work seamlessly with Xero and other accounting integrations.

Both invoices (original and surcharge) sync automatically, using the account codes and tax rates you've configured.

 

Why did Formitize build this feature?

We built Separate Surcharge Invoices to:

• • Support flexible accounting requirements

  • Improve financial reporting clarity

  • Eliminate manual workarounds

  • Help businesses scale without added complexity

It's another step toward making Formitize work the way your business does.

 

Is there any additional cost to use this feature?

No.

Separate Surcharge Invoices are included with PayNow at no additional cost.