Accounting Flows

Below we’ve outlined the most common accounting flows, and how money moves during each process.

Note: The Transactions report is our way of tracking these flows in the Dashboard. The tag column indicates what kind of transaction was performed.

Before diving in, it’s important to know a few key terms as they relate to our accounting:

• Escrow account: An account that temporarily holds funds during a transaction between two parties. In the Dashboard, a client’s To Be Paid Out account is an escrow account. FareHarbor also has an admin To Be Paid Out account (which, in actuality, is several To Be Paid Out accounts that cover various currencies).

• Deposit account: A type of account that allows money to be deposited and withdrawn by the account holder. For the purposes of this documentation, a client’s Refund Reserve is a deposit account that lives within the Dashboard.

Initial Payment (charge created)

When a charge is created, money flows from the end customer’s bank or credit card account to Stripe, and then to the client’s escrow (or To Be Paid Out) account. At this point, the transaction will show as “pending” on the end customer’s side.

Payout

During a payout, money flows from the client’s To Be Paid Out account into their bank account. This occurs once a day according to our payout schedule.

Note: Payouts are not tracked in the Transactions report.

Refunds

Refunds in FareHarbor

When a client refunds a customer in FareHarbor, the money for the refund can come from several different places:

1. Escrow account – If there is enough money in the client’s escrow account, the full amount will be taken from escrow, processed in Stripe (at that point the charge is marked as refunded in the FareHarbor booking), and then to the end customer’s bank. The end customer’s bank then decides when to make the funds available to the customer (this often takes 3-5 business days).

   

2. Deposit + escrow account – If the client does not have enough in their To Be Paid Out account but can cover the rest of the refund amount with the money in their Refund Reserve, then money is first moved from the deposit account to the escrow account. The rest of the process follows the outline above.

   

3. Bank debit – If the client doesn’t have enough in their To Be Paid Out account and Refund Reserve combined, the full amount of the refund will come out of their bank in the form of a bank debit. This generally takes longer because the client’s bank may take a few days to make the funds available.

   

A few notes on refunds

• Refunds are represented in a client’s payout report as negative numbers.

• If a partial refund is being issued (i.e. the customer is not being refunded the full charge), then the booking fee/processing fee is not refunded to the customer.

• On the client’s Payouts report, the refund net = the refund gross (the amount the end customer receives) minus the calculated processing fee

Adjustments: Processable

Adjustments are not as common as the three scenarios above, but happen occasionally when dealing with disputes or one-off accounting situations.

Most adjustments are processable, meaning they move money in Stripe. An example would be when a client wins a dispute and we move the disputed amount back to their escrow account. In these cases, the funds are processed through Stripe.

Note: If the adjustment is not successful for whatever reason, then funds are returned to the source account and not delivered to the destination account.

Adjustments: Non-Processable

Non-processable adjustments are only created when there is a discrepancy between the client’s FareHarbor and Stripe accounts and we need to adjust the amount in FareHarbor to match what Stripe has on record.

External

External adjustments move money directly between Stripe and the client’s escrow account in FareHarbor.

Internal

Internal adjustments move money between the FareHarbor admin escrow account and the client’s escrow account.

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Additional information about Adjustments and how we use them can be found here.