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Recording Donations received via PayPal

QB Desktop for nonprofits Premier 2019.

I'm just starting QB for the first time this new year in 2019. I have set up the books and done all the donations/deposits and bill payments for our checking and savings account. I am now recording the donations made to our PayPal account using Donations icon (Sales Receipts). I listed each donor and the date and amount of the donation, including the PP fee with a negative number (-0.74) so the actual amount that we receive is correct. However now i have those donations showing in my Make Deposits window and I wouldn't be making a deposit to our bank account with those. I would be occasionally just be transferring the balance from PP to our checking account several donations at a time. How do i clear the Make Deposits window? I see on the home screen that i have 3 deposits (in red) to be made. Do i actually "make a deposit" somehow to our PP account in QBs? But if i did that, then whenever i actually transferred an accumulated amount of deposits from PP to checking, the checking balance wouldn't reconcile.

Thanks for your help.

Ann

 

Best answer 02-25-2019 03:37 PM

Accepted Solutions
Established Community Backer ***

Re: Recording Donations received via PayPal

Let's take it a bit at a time:

"If i buy some books online or at a store to sell and I pay immediately, that's a purchase for me, so to properly record this, do i use...

- Vendor > Enter Bill" <== You already paid. There is No Bill that needs to be entered, and then Paid Later. You Already Paid.

 

"and when i purchase something and pay immediately, I go directly to Write Check"

 

Write Check = paid directly from Checking using paper check, paperless, debit card, EFT, ACH, etc.

 

"or Enter Credit Card Charge ?"

 

If you put it on the Card, sure, you need to enter how you paid for it = bought it by using the credit card.

 

"If so, when do you use Vendor/Nonprofit path?"

 

Menu = words at the top. Vendor Menu = vendor tools. NonProfit menu = a subset of tools grouped together for convenience, that show as if they are specifically NFP functions, but they are not. it's just an Extra Menu holding a set of the standard tools seen elsewhere.

 

"and then when i sell the book to a customer, do i use...

- Nonprofit > Receive Payment (Customer Payment window) ?"

If you Made the sale by listing it on an Invoice, you will Receive Payment to show the invoice got paid, when it gets paid. If you also got paid right then, that is Sales Receipt. This is from the Customer's menu, because it relates to Customers.

 

Purchases are entered for who and when you paid, from which source of resources: Checking, Cash on Hand bank, Safe Bank, Credit Card. Or, Bill = to be Paid Later, such as an Auto Parts store makes multiple daily deliveries to the Auto Repair shop, and then sends a Statement at Month End for them to Pay later. Each delivery is Enter Bill. The payment against the statement is Pay Bills, selecting all the deliveries that now are being paid for.

12 Comments
Senior Explorer **

Re: Recording Donations received via PayPal

You need to create Paypal as a Bank account in QB. Make the appropriate deposits to the Paypal account. As you transfer money from Paypal to your regular checking account, you will record a Bank Transfer (Banking menu).  You can and should reconcile Paypal just as you would any bank account. 

Established Community Backer ***

Re: Recording Donations received via PayPal

set up a bank type account named paypal

 

use make deposits and deposit the amount to the paypal bank account

 

when you move money from paypal to the checking account, use transfer

Established Community Backer ***

Re: Recording Donations received via PayPal

And this part here is an error: "I listed each donor and the date and amount of the donation, including the PP fee with a negative number (-0.74)"

 

The Donor gave you that Gross amount. The Banking or PP fee is Yours, not theirs. It doesn't reduce Donation. It reduces Banking. Your Gross Donation is a Net to Bank.

 

"now i have those donations showing in my Make Deposits window and I wouldn't be making a deposit to our bank account with those."

 

Go to Edit menu > Preferences, Payments on the left, then Company Preferences tab on the right. Remove the checkmark for "Use UF as my default."

 

Now the top of the Sales Receipt offers "Deposit To:" and you select Pay Pal Bank. You get a statement from PP and you track this Gross Deposit into PP bank. You use Banking menu > Write Check to enter that the PP Bank, top left, incurred a Banking Fee. Now you reconcile this PP Bank to the PP statement. And yes, you Transfer funds to checking when you want to Move Funds from PP to Checking. This is not when you got the income. This is just banking.

 

And you will also Make Deposit for those historic Sales Receipts, now, to the PP bank. But fix them and Remove your Banking fee.

Senior Explorer *

Re: Recording Donations received via PayPal

I'm replying to each of the 3 of you individually who gave me good information...

1) I have created PayPal as a "bank" account as well as my regular checking account and my savings account, so i have 3 accounts to which money will be deposited.

2) As a nonprofit, I was advised earlier that I do not use from home (icon) screen I should NOT use "Receive Payments" bc that is for payment of items that were invoiced or that we sell.

3) I was advised for a nonprofit, in order to be sure their donation is properly recorded, I should use the home screen icon "Donations" (Sales Receipt) and then record customer info so they'll be credited in the reports and on that screen there is no place to choose the account (Checking or PP, etc) - i just choose the Item I've created - Donations... so I did that for the PP donations as well choose Items > Donation.

4) When I go to Make Deposits these donations are listed and I compile them into a deposit to the bank. The donations made to PP are listed just like the banking Donations but there is no place on the "Payments to Deposit" screen to choose to deposit them to PP.

5) I understand that as any point that we're ready to move the money from PP to checking, I can do a bank transfer but confused about how to handle donations that are made to PP and sit there until i transfer the total PP amount into our checking account.

 

Please let me know where in this process I am off track.

Thank you,

Ann

Senior Explorer *

Re: Recording Donations received via PayPal

I have created an account for PayPal, just like i created a checking and savings account.

I see now that after i check the 3 donations in the Make Deposits screen, then the next screen allows me to choose the account. That's what I missed.

However the other reply informed me that i made a mistake when entering the donations initially because of how i deducted the PP fee... the donor wouldn't get the full credit for their donation. I had entered the donation ($20.00) and next line the fee as negative  (-$0.72) and the fee should be entered in a different place. When i make the correction on the donation, will the PayPal account automatically update? Shows the donations minus the fees.

How do i correct that?

Senior Explorer **

Re: Recording Donations received via PayPal

Hi Ann,

My recommendation is to omit the Paypal fee on the Sales Receipt and deposit the Sales Receipt directly to the Paypal account (assuming you have changed the preference to no longer default to Undeposited Funds.)  This saves a step and saves you time. It also gives the donor full credit for the donation and posts the gross amount as a deposit into Paypal.  Since the Paypal account is a bank account, as previously recommended, use the Write Check screen to record the payment of fees to Paypal. Reconcile regularly just as you would any bank account. There are reports available on Paypal that are similar to bank statements.

 

For existing Sales Receipt transactions in QB, if you went through Undeposited Funds, QB will make you delete the Deposit before you are allowed to edit the Sales Receipt to remove the negative line.  If you did not go through Undeposited Funds and instead posted the Sales Receipt directly to the Paypal bank account, you will be allowed to edit the Sales Receipt.

 

I hope I've been clear. Let me know if not. Good luck!

Established Community Backer ***

Re: Recording Donations received via PayPal

Item 2:

Sales Receipt = Donation Form, because you already got paid.

Invoice = Pledge, such as Grant tracking or Fundraiser, or annual Dues = the payment is later than the date on that unpaid sale

 

You use what applies to you for each type of activity.

 

I recommend the book Running QB for Not For Profits, by Kathy Ivens. Don't listen to whoever told you Never to use Receive Payment; they are Wrong.

 

3. Customers menu has Customer Transaction. Donors and Sponsors are Customer names, in QB, if you need to track it in QB. Or, Home Page Icon. Or, left side shortcuts bar. That's how you get to the function from various perspectives, but that opens the same function, no matter where you access it from. I don't even use the Home Page, most times; I teach from using the menu, since it is always in your view at the top.

 

4. After you Select from the UF pop up, the next screen is the Actual Deposit screen, and top left, select Operating Bank. And you might like to use a Payment Method of PP as well as the other selections, so that when you work on a Sales Receipt or a Receive Payment, you assign Payment Method. Then, in the Make Deposit function, you see how you can select from the UF Pop up to show yourself only "payment method = Checks." That makes it simpler to identify and subset "by bank as destination account." That's why Payment Method is our list to control and to add to, for our own tracking needs.

 

5. The sales receipt or payment is Deposited to PP bank, which you do Directly in the Sales Receipt Screen or the Receive Payment screen. You don't flow them into UF first, since they hit the PP bank individually.

 

You Batch a total deposit into an envelope to take to the bank teller, in real life. I process 41 payments via ACH, for one date against invoices, and will see One Deposit Total into Banking from the bank statement and I want that same condition in QB. If people pay me by PP, that is Individual entries directly to PP bank.

 

Your bookkeeping should match your reality.

Senior Explorer *

Re: Recording Donations received via PayPal

ok thank you...

2) I have purchased and I'm using Running QB in Nonprofits by Ivens and it's very helpful. I do use Donations from home screen (= Sales Receipts) to record donations and send it to UF bc I often Make Deposits with more than one of the donation checks. We occasionally buy books or order tshirts to sell but usually pay when purchased so since that wouldn't be an "unpaid sale" I assume I could still enter these as a Sales Receipt item (rather than Donation item that I've created). But if I order something that will be paid later, I will enter as an invoice, if I'm understanding you correctly.

Page 128 in Ivens book, she says to use Customer > Enter Sales Receipt (Donation) which I think is what you're describing. So I'm not sure what you meant by "Don't listen to whoever told you Never to use Receive Payment; they are Wrong." because I understand Receive Payment is not for use for Donations but it is used for items that we invoice for future payment and then we are paid. So we would use Receive Payment for that purpose, I assume? Just wanting to clarify...

3) Re Customers menu, if i choose Customer Center, I can then see all the Donors list and clicking on each will show each donation they've made. (Is this the best way to view all their donations?) I now see that i just didn't go to next screen so i could apply donation to PP account and I understand that now for future. I wanted to start completely over and do it right by first unchecking UF in preferences before doing a PP donation so i could put it directly in PP and not UF. I was able to delete the 3 donations in PP account but how do I delete them from showing under the donor's name in Customer Center so i clear this and do the transaction properly making the entire $20 donation show up? See screenshot attached.

4) and 5) (are now understood)

Thank you...

 

Established Community Backer ***

Re: Recording Donations received via PayPal

You seem to be describing your Purchase, not a Sale, here: "We occasionally buy books or order tshirts to sell but usually pay when purchased"

 

That is your Write Check or Enter Credit Card Charge/

 

"so since that wouldn't be an "unpaid sale" I assume I could still enter these as a Sales Receipt item (rather than Donation item that I've created)."

 

No, that is confusing two different things:

 

I am buying tickets to an event + giving you a donation. I am standing right there, offering Money. That means you list the Ticket Fee item and the Donation Income item on a Sales Receipt for me.

Or,

I am on The Phone. I will pay at the Will Call Windows for the event. That means you Enter the same two charge items on an invoice and email it to me. I bring it to the Will Call Window at the event and I pay then.

 

"But if I order something that will be paid later, I will enter as an invoice, if I'm understanding you correctly."

 

No, that's Bill = I pick up shirts from the Printer and they allow me to Pay in 30 days. That is vendors = suppliers of goods and services. We pay them for goods and services.

 

Donors/Customers give us money.

 

"Page 128 in Ivens book, she says to use Customer > Enter Sales Receipt (Donation) which I think is what you're describing. So I'm not sure what you meant by "Don't listen to whoever told you Never to use Receive Payment; they are Wrong." because I understand Receive Payment is not for use for Donations but it is used for items that we invoice for future payment and then we are paid."

 

Look up the meaning of the word Pledge. I Pledge to pay you $12,000 this year, as $1,000 a Month = Put the donation item on an Invoice. Do that every Month.

 

"So we would use Receive Payment for that purpose, I assume? Just wanting to clarify..."

 

You seem to be confusing what you List on the sale, with How to use the Sales Transactions. But the relationship is: I list what applies to this Sale. I put on a sale receipt or an invoice based on if I am being Paid for that same date or paid later.

 

Not what you are Listing, but when the payment needs to be dated. Sales Receipt = One Step. Invoice and Receive Payment = Two Steps, to allow for Different Dates.

 

"3) Re Customers menu, if i choose Customer Center, I can then see all the Donors list and clicking on each will show each donation they've made."

 

Shows their Transaction Listing.

 

"(Is this the best way to view all their donations?)"

 

You also run reports. That Sales receipt for me, in my example, included Event Tickets purchased and donation. Sales reporting, such as Sales by Customer or Sales by Item, is how you see Donation vs Tshirt vs Event Tickets vs Grant Income.

 

"I now see that i just didn't go to next screen so i could apply donation to PP account and I understand that now for future. I wanted to start completely over and do it right by first unchecking UF in preferences before doing a PP donation so i could put it directly in PP and not UF."

 

Yes, exactly; see it to take manual and specific control, each time you process the sales receipt or the received payment.

 

"I was able to delete the 3 donations in PP account"

 

I think you mean Sales Receipts?

 

"but how do I delete them from showing under the donor's name in Customer Center"

 

Okay, you Removed the DEP entry, which put the Funds from the Sales Receipt back into UF. You need to open the Sales Receipt from customer center (double-click it) and Delete it (Edit menu > Delete or Ctl + D). Now make it Fresh. Now you see your new option.

 

Notice those are Transaction Types: DEP, Invoice, Sales Receipt, PMT.

Senior Explorer *

Re: Recording Donations received via PayPal

You're right... I did not explain this very well... you said:

"You seem to be describing your Purchase, not a Sale, here: "We occasionally buy books or order tshirts to sell but usually pay when purchased" That is your Write Check or Enter Credit Card Charge/"

OK... trying again...

If i buy some books online or at a store to sell and I pay immediately, that's a purchase for me, so to properly record this, do i use...

- Vendor > Enter Bill > Save and then Vendor > Pay Bill > Pay Selected Bill or

- Nonprofit > Enter Bill > etc... same options are available (does it matter?)

or you're saying just skip all that and when i purchase something and pay immediately, I go directly to Write Check or Enter Credit Card Charge ? If so, when do you use Vendor/Nonprofit path?

 

and then when i sell the book to a customer, do i use...

- Nonprofit > Receive Payment (Customer Payment window) ?

 

(I'm sorry... I will ask just one question at a time to try to be less confusing...)

 

Established Community Backer ***

Re: Recording Donations received via PayPal

Let's take it a bit at a time:

"If i buy some books online or at a store to sell and I pay immediately, that's a purchase for me, so to properly record this, do i use...

- Vendor > Enter Bill" <== You already paid. There is No Bill that needs to be entered, and then Paid Later. You Already Paid.

 

"and when i purchase something and pay immediately, I go directly to Write Check"

 

Write Check = paid directly from Checking using paper check, paperless, debit card, EFT, ACH, etc.

 

"or Enter Credit Card Charge ?"

 

If you put it on the Card, sure, you need to enter how you paid for it = bought it by using the credit card.

 

"If so, when do you use Vendor/Nonprofit path?"

 

Menu = words at the top. Vendor Menu = vendor tools. NonProfit menu = a subset of tools grouped together for convenience, that show as if they are specifically NFP functions, but they are not. it's just an Extra Menu holding a set of the standard tools seen elsewhere.

 

"and then when i sell the book to a customer, do i use...

- Nonprofit > Receive Payment (Customer Payment window) ?"

If you Made the sale by listing it on an Invoice, you will Receive Payment to show the invoice got paid, when it gets paid. If you also got paid right then, that is Sales Receipt. This is from the Customer's menu, because it relates to Customers.

 

Purchases are entered for who and when you paid, from which source of resources: Checking, Cash on Hand bank, Safe Bank, Credit Card. Or, Bill = to be Paid Later, such as an Auto Parts store makes multiple daily deliveries to the Auto Repair shop, and then sends a Statement at Month End for them to Pay later. Each delivery is Enter Bill. The payment against the statement is Pay Bills, selecting all the deliveries that now are being paid for.

Senior Explorer *

Re: Recording Donations received via PayPal

Wow... you are a very patient instructor. I can tell you do teach bc of the way you break it down for "slow" students trying different ways to explain things... but I think I've finally got it! (I used to teach HS/college CAD and so I appreciate your teaching methodology alot... currently feeling a bit "dense" learning a completely new software here.)

Again thank you for your patience. I'm going to hit Post here but then also click Accept Solution on the this reply.

Thank you!