Hi, I have some sponsors who are contributing money every month to a private registered company in return for updates and postings on a Patreon page that belongs to the company. I have made the first payment now from Patreon into a Paypal account, which is also registered in the company name. I created a new bank account in Quickbooks to represent this Paypal account. I'm not sure how to proceed recording this transaction. Can someone please link me an article or tutorial that explains how you would describe Patreon income, or briefly summarise it here? I'm not an accountant, so the simplest possible solution/explanation would be appreciated.
Welcome to Community, @DarkForgeGame.
I'll share the steps on how to go around recording donation transactions. You'll want to create a chartitable contribution account first (or use your PayPal account) where you record the contributions. Once you have the account, the next step is to create a product/service item for donations.
After that, issue a credit memo for the value of the contribution to your sponsor. This process will reflect the amount of your contribution and will be used to apply on the invoice. For details, check out this guide and proceed to Steps 4 and 5: How to record donations or charitable contributions.
If you're trying to record cash contribution, you can set up your sponsor as a vendor and then record a check or bill and payment as you would for any other payment to a vendor. Just make sure to select your PayPal account from the Account drop-down in the Account details section. You can find the step-by-step instruction in the guide above.
For your reference, click these links. It has information and steps in case you need them.
I'll be on the look out if you still have questions or concerns. Just drop them in the reply section and I'll be there to answer them for you. Take care and stay safe.
hi, thanks for the advice and reply. I've only just got round to following it.
I connected the paypal business account to quickbooks, this imported the balance correctly as well, which reflects the money deposited into paypal from patreon.
I created an invoice to patreon for the balance that is in the paypal account, and then issued a credit note for the same amount. This has now recorded the income in quickbooks, and it correctly says that the balance is matched.
So quickbook shows an income for the amount in the summary screen as 'income', but it does record it under the profit and loss section. Is this correct? Surely this income is taxable?
is there any extra step I need to do?
Yes, you're correct, @DarkForgeGame.
Also, it will depend if you recorded the transaction as taxable income. There are no additional steps to include and it's how you can record the income in QuickBooks Online.
Also, if you have accounting concerns, you can reach out an accountant for professional advice.
When it's time to review your accounts in QuickBooks to make sure they match your bank and credit card statements, you can reference this video article for the process: Reconcile an account in QuickBooks Online.
Please place a comment anytime if you need more assistance with QuickBooks. I'll make sure to reply as fast as I can. Stay safe and well, DarkForgeGame.