Accounting for Wire/Transfer Fees

When paying out balances owed to payees, it's common for there to be a cost associated with making the actual transfer.

E.g. if a payee on a 50/50 deal is owed $1000 and there's a $50 bank wire cost to get them that money, the payer may subtract $25 on the spot and pay out only $975.

This is fine to do (with the payee's consent of course), but does require some attention to keep everyone's balances straight.

The Best Way To Handle

Pay out the full balance
Add the payee's share of the fee as a negative transfer, assigned to any release on the recouped ledger you just paid out

The cost will now be recouped by its being factored into their next payable balance. This is the simplest and most direct way, but does require manually determining the payee's share of the cost (if indeed it is to be split).

Another Way

If you'd rather recoup the cost right away:

Subtract the payee's share of the fee from their balance
Pay out the remainder
Add a negative transfer for the same amount you subtracted

This means you won't be out of pocket for the cost until the next payout, but also means explaining to the payee why the payout is less than the balance, which is usually less preferable given you'll almost certainly recoup the cost by the next payout (especially if you have a minimum payout threshold).

A Potentially Thornier Way

Another way is to confirm with payees (contractually or verbally) that such fees can be considered shared recoupable expenses. Given that, we could simply add the expense to a release on the recouped ledger, and the payees' shares of that expense will be deducted from any balances otherwise owed. In a single payee situation, this would yield the same result as the above options without needing to manually determine the payee's share of the cost.

However given that there are often multiple payees, with varying abilities to receive money with or without fees, it can be a bit thorny to ask one payee to be on the hook for a portion of another's transfer fee. There's also the potential issue of other payees on the release not being recouped; if they never did, the catalog would be out of pocket for that portion of the fee.