I have a PayPal account, linked as bank account in QBO. When I get payment against a Quickbooks invoice via PayPal, the expense is automatically (I don't know how - I don't have a rule) credited to an Expense account for Credit Card Fees, which is correct. The customer account shows the invoice as paid and their balance to be zero. However, in the PayPal fee, I have the invoice amount, less charges, showing as a credit on the PayPal account. If I try to match this with a sales invoice it will not match because of the PayPal charge. However, if I manually add an expense line to reconcile this difference, that results in duplicate expense entry.
How should I treat this - should I just exclude the PayPal entry for the invoice since the invoice is already listed as paid?
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Hi there, @Nelly111S.
Yes, you're right. You can exclude the PayPal entry if the expense will show on the Banking page that is opposite with your invoice payment. Let me show you how.
These items are no longer reported as part of your business finances and will not appear in any associated account registers or reports.
I've got a great article for you that provides additional details on excluding transactions. You can view it by clicking this link: How to exclude expenses from downloaded bank transactions?
Also, I'm adding these articles that will guide you on how to categorise and reconcile your transactions:
Drop me a reply if you have any follow-up questions about excluding transactions or any QuickBooks related. I'm always happy to help.
Thanks, I understand that I can exclude , then delete items, but is this the correct way of using QBO in this instance?
Also, what happens when I have a manual Sales Receipt and then a PayPal payment. Since the Sales receipt is not marked as paid, I cannot exclude/delete the PayPal transaction. What happens in this case?
So long as the account reconciles, there is not a right or wrong way of doing this. If you enter a manual sales receipt in QuickBooks this is automatically accounted for as being paid due to the nature of the transaction.