A transaction method records how money changed hands on a sale or purchase — cash, credit card, PayPal, Venmo, a marketplace's checkout, and so on. It is more than a label: it is where you capture the processing fees that quietly shave money off every electronic sale.
Those fees matter more than they first appear. A method can carry a fixed fee, a percentage fee, or both, and a roughly 3% card fee plus a flat per-transaction charge can turn a slim margin into a loss on small orders. Exact rates vary by processor and change over time, so confirm your current rates. Recording each method with its fee structure means your net proceeds — and your true profit — reflect what actually hit your account, not the sticker price.
Defining your common methods once lets every transaction reference them consistently, so reports can show not just what you sold but how much you handed back to payment processors along the way.
Related terms
Pricing Tier
A named pricing configuration (like retail, wholesale, or market) that applies a markup or adjustment formula to calculate prices. Useful for selling at different price points.
Adjustment
A transaction that corrects inventory quantities without a purchase or sale. Used for damaged goods, waste, samples, or other non-sale removals from stock.
Tax Category
An IRS Schedule C expense or income category used to classify transactions for tax reporting. Helps organize your financial data for end-of-year tax preparation.