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IndiaGeneral AccountingUpdated: Sep 13, 2026
Direct Answer
POS machines settle batches net of Merchant Discount Rate (MDR). You must book the daily gross sales to a "POS Clearing" account. When the bank credit arrives, transfer the net amount to the Bank and expense the MDR difference to "Bank Charges".
Avoiding Under-Reporting
If a retail shop swipes ₹50,000 on an HDFC EDC machine, the bank might credit ₹49,250 the next day. If the accountant books ₹49,250 as sales, the GST return will be under-reported by ₹750, triggering notices.
The Clearing Account Workflow
- Day 1: Debit
POS Clearing₹50,000, CreditSales₹50,000. - Day 2: Debit
HDFC Bank₹49,250, DebitMDR/Bank Fees₹750, CreditPOS Clearing₹50,000. This ensures GST on sales is perfectly aligned with the billing software, and the MDR expense is captured correctly.