*** PROPOSAL REVIEW***
Quickbooks Merchant Fees Proposal

PTSO Quickbooks Merchant Fees Proposal

February 24, 2025

 

History & Current Status

 

PTSO adopted Quickbooks as a payment processing platform for Grade Level Invoices because the OVO community expressed the desire for payment convenience with credit and debit cards. This platform has served OVO well, however, like all merchant accounts, there are convenience fees for the service.  In addition to the subscription fee of around $450 a year, Quickbooks charges a Merchant Fee of 2.9% for each credit/debit card transaction and 1% for each ACH transaction.  In the 2023-2024 school year, PTSO paid $4,703.00 in Quickbooks Merchant Fees to bring in over $233,000.00 in Invoice Payments. 

 

Quickbooks does have a feature where the merchant (PTSO) can offer an option for the payer (OVO parent) to select to pay for their own merchant fee, and PTSO has consistently offered that on all invoices.  Historically, hardly anyone opts in to pay for that fee.  Additionally, one of the limitations of Quickbooks is that the merchant (PTSO) cannot require that the payer (OVO parent) pays the fee.  

 

This academic year, PTSO has moved as many events as possible to a fee-free platform called Zeffy.  As of February 22, 2025, Zeffy events throughout the school have raised $31,823.67 and PTSO has saved $1,594.58 in credit card fees by using Zeffy.  Unfortunately, Zeffy does not offer invoice capabilities at this point in time.  

 

PTSO also attempted an exhaustive trial of the platform Square to see if Square could replace Quickbooks for Grade Level Invoices.  The trial did not work.  Square does not allow for partial payments, meaning that parents would have to pay their entire Invoice at once, which the trial grade strongly opposed.  Square also does not provide the ability to batch invoice, making back-end accounting nearly impossible and severely time consuming. The Head Grade Treasurer is a volunteer position responsible for this invoicing, and using Square turns this one aspect of the volunteer position into a full-time, unpaid, job.  

 

Up to now, PTSO has paid for Quickbooks Merchant Fees with money raised primarily at the Annual Spring Fundraiser. This is not ideal because thousands of dollars are being raised by a small portion of the OVO parent base to go to nothing but Quickbook Merchant Fees.  It is concerning that in the event that the Annual Spring Fundraiser does not net enough profit to cover the Quickbooks Merchant Fees along with PTSO’s other administrative fees, the PTSO would be in the red, operating at a financial loss.  With the rising costs of administrative fees in general, PTSO is carefully evaluating all expenses and operating as conservative as possible. 

 

PTSO Quickbooks Merchant Fees Proposal

February 24, 2025

 

Solution Options 

 

Option 1: No Changes  

PTSO can continue to pay for the Quickbooks merchant fees.  Parents rely on being able to use credit cards to pay their invoices and PTSO could consider the ability to provide this service as the most valuable offering PTSO can make to the school in helping the OVO Program operate. While spending thousands of dollars on fees isn’t ideal, it is the price of doing business with Quickbooks and enables the school to bring in vast amounts of funds. 

 

Option 2: Add a Flat Rate Pass-Through Line Item to Grade Budgets

Everyone in the school has the opportunity to enjoy the perks of paying via Credit Card, therefore everyone in the school shares in the cost of that perk.  We share the cost as a community by adding a Quickbooks Merchant Fee Pass-Through Line Item to each Grade Level Budget, like we currently do for Staff Appreciation and Tech Fees.  The cost of the Quickbooks Merchant Fee Pass-Through Line Item would be determined by taking the previous year’s Quickbooks Merchant Fees total and dividing it by the number of paid invoices.  That number would give a flat fee that would then be added to the Grade Level Invoice.

 

Hypothetical example: In the previous academic year, 450 invoices were paid via Quickbooks, generating $5000 in fees.  $5000/450=$11.11.  $11.11 would be added to every invoice as a Quickbooks Merchant Fee Pass-Through Line Item.   

 

Option 3: Add 3% to Each Invoice

Add 3% to each Quickbooks invoice based on grades invoice cost. Example, the 6th Grade Invoice is $1,205.41.  3% of that is $36.16.  Add those together, making the 6th Grade Invoice $1,241.57.  Similarly, the Kinder Invoice is $330, 3% is $9.90, making the Kinder Invoice $339.90.  When the Head Grade Treasurer receives a Grade Invoice Payment (for any amount), the Head Grade Treasurer will forward 97% of the money collected to the grade, retaining 3% that will be transferred to PTSO to be used to pay the Quickbooks Merchant Fees.  The upside to this is less fees for certain grades…the downside is higher fees for certain grades.  Another downside is that by raising all invoices by 3% at the Point of Sale, we actually don’t avoid paying the Quickbook Merchant Fees at all.  In fact, we will increase the amount of the fees overall, but create a stream of income for PTSO to utilize to pay said fees.      

 

Option 4: Rubric Payout

Currently, 100% of the profits raised through PTSO’s biggest fundraisers (Jog-a-thon and Carnival) are distributed to the grades, using a calculation called the Rubric to determine how much each grade receives.  The payout is calculated at the end of the calendar year and distributed in late January/early February.  This year, for example, PTSO raised over $22,000 through Jog-a-thon and Carnival, and was therefore able to distribute funds covering 8.8% of each grades’ Overnight Field Trip expenses. 

 

One option to help PTSO cover Quickbooks Merchant Fees would be for PTSO to retain a portion of the funds raised through Jog-a-Thon and Carnival before distributing through the rubric. Using this year as an example, if PTSO were to have retained the projected costs of the QuickBooks Merchant Fees expenses, the rubric payout would have been decreased to 7.7%.