Settling Payouts and Clearing Balances

When you receive online donations through platforms like Givebutter, Stripe, Donorbox, or PayPal, those platforms collect the money and then deposit it into your bank account — usually as a lump sum after deducting their processing fees. Settling a payout is the process of matching that bank deposit to the donations that were recorded in your books, so everything lines up correctly.

Until you settle a payout, your books show donations "in transit" — money that has been recorded as received but hasn't been matched to your actual bank deposit. Settling clears this transit balance, records the processing fees as an expense, and ensures your bank account balance in NP Ledger matches what's actually in your bank.

• Donations from at least one platform recorded in NP Ledger (via automatic donation connections or manual entry)
• The actual payout deposit visible in your bank account or bank statement
• Know the net amount that was deposited (the amount after the platform deducted its fees)
• A Standard plan or higher

Option 1: Settle during bank reconciliation (recommended)

When you import a bank statement during reconciliation, NP Ledger automatically detects deposits that look like donation platform payouts.

1. Start a bank reconciliation and import your bank statement as usual (see Bank Reconciliation).
2. NP Ledger detects payout deposits in your statement. You'll see a "Payout Deposits Detected" screen showing each detected payout with:
3. The platform name and deposit amount
4. A fee calculation showing gross donations, processing fees, and net deposit
5. A preview of the journal entry that will be created
6. Review the fee breakdown. The gross amount is the total of all pending donations. The net amount is what landed in your bank. The difference is processing fees.
7. Click "Confirm Settlement" to post the journal entry and clear the transit balance.
8. Or click "Skip — handle manually" if you want to deal with this deposit later.

Tip: If the deposit amount is larger than the pending donation total, you'll see a warning explaining the residual. This usually means some donations haven't been processed yet — the extra amount stays in the clearing account until it can be matched.

Option 2: Settle from the Resolve page

If you didn't settle during reconciliation, or if you want to settle without importing a statement:

1. Go to the Resolve Pending Donations page. You can reach this by clicking the "Resolve" button on the dashboard banner that appears when donations are waiting, or from the clearing alerts.
2. Find the platform you want to settle. Each platform with pending donations shows a card with the donation count, total amount, and how old the oldest donation is.
3. Click "I have the deposit — settle now" under the "Yes, I received the payout" section.
4. Enter the net payout amount — the exact dollar amount the platform deposited in your bank account (after their fees were deducted).
5. Select the bank account where the payout was deposited.
6. Click "Preview Settlement" to see the journal entry before it's posted.
7. Review the preview:
8. Debit to your bank account (net amount)
9. Debit to Payment Processing Fees (fee amount, if any)
10. Credit to Donations in Transit (gross amount)
11. Click "Confirm & Post" to finalize the settlement.

You'll see a confirmation screen showing the deposited amount, fees recorded, and number of donations resolved.

Viewing settlement history

1. Go to Settlement History to see all past payout settlements.
2. Filter by platform using the dropdown if you want to see settlements from a specific provider.
3. Each row shows the date, platform, gross amount, fees, net deposit, bank account, donation count, and a link to the journal entry.

When donations have been sitting in transit for a while, NP Ledger shows a banner on your dashboard:

• Green age indicator — Donations are less than 7 days old. Most platforms deposit within a few business days, so this is normal.
• Amber age indicator — Donations are 7-14 days old. The payout may have arrived in your bank but hasn't been matched yet.
• Red age indicator — Donations are more than 14 days old. Check your bank account — the payout has likely arrived and needs to be settled.

You can dismiss or snooze these alerts if you need more time.

• The net amount you enter matches exactly what the platform deposited in your bank account
• Processing fees look reasonable for the platform (typically 2-4% of the gross amount)
• After settling, the Donations in Transit balance should decrease by the gross amount of the settled donations
• Your bank account balance in NP Ledger increases by the net deposit amount

• Entering the gross amount instead of the net — The settlement form asks for the net amount (what actually landed in your bank). If you enter the gross (before fees), the fee calculation will be wrong. Check your bank statement for the exact deposit amount.
• Settling the wrong platform — If you use multiple donation platforms, make sure you're settling the right one. Each platform's payouts are tracked separately.
• Ignoring the dashboard banner — Pending donations don't go away on their own. If the banner has been showing for more than a week, check your bank account for the payout deposit.
• Confusing individual donations with payout deposits — Donation platforms batch multiple donations into a single payout. You settle the payout (one bank deposit), not each individual donation.

Accountant note: Processing fees from donation platforms are classified as a cost of fundraising for functional expense reporting purposes. When your organization prepares a Statement of Functional Expenses, these fees belong in the fundraising column — they represent the cost of accepting charitable contributions, not a program or management expense.