Adding paypal transactions to quickbooks

diversity62 · ‎September 14, 2018

Hi,

I've not been using Quickbooks for long and can't seem to get an answer to this via their helplines.

I do very simple accounting via importing my bank transactions and then selecting them to add to Quickbooks. I reconcile against my statements outside of Quickbooks before adding.

My question is, i have added all bank current account transactions for the year into quickbooks. This include money coming in FROM Paypal and some money going out TO Paypal.

For the purposes of this year accounts (as we've not done much this year), my accountant suggested that i don't need to add Paypal transactions to Quickbooks, since all money received from there goes direct into my bank account anyway. Does this mean i can just simply add any Paypal transactions that arent represented in the current account, and leave the rest?

If i do need to add all Paypal transactions into Quickbooks and then take off fees etc. Does this then mean my accounts have transactions twice? (eg: I received £17.99 for a sale, less fees taken at Paypal end, my bank account receives £17.18... which is fine. But does this mean my accounts now have income of £17.99 and £17.18? When it is one transaction?

And how do transfers work? if i made a transfer from my current account to my Paypal account, that was recorded in the current account as a 'transfer'... when i see it in the Paypal account, do i just leave it? or do i need to click 'Transfer' or 'add'?

Apologies, i cant get my head around it, and don't want to double up the figures.

Thanks,

JamesC · ‎September 14, 2018

Hi Diversity62,

Thanks for your post, welcome to the UK Community Page for QuickBooks Online.

Normally, what we would always recommend is using the PayPal account as an asset or bank account, and whenever you record your invoices/sales receipts as paid, you'd record directly to PayPal (Deposit to PayPal). This would give you an amount of money on your Balance sheet sitting within PayPal. Lets use your example: £17.99 recorded as paid to PayPal Account

We'd then recommend recording your expenses for PayPal as coming out of the PayPal Asset (Bank) Account. £0.81 Expense to PayPal Expenses (Or your fees expense account) recorded as paid by PayPal Account

This would leave the net pay balance as sitting in the PayPal Account. You'd then Transfer this amount to the Bank account, allowing you to correctly match to the payment. £17.18 Transferred from Paypal to Bank Current Account

My Recommendation depends on how labor intensive it will be to fix, how many transactions do you have? My recommendation would be to go through all the transactions that have been marked as paid to bank account directly, change that as paid to PayPal, and from there, you can transfer the correct amounts from PayPal to Current Account, leaving only the amount you need to expense out as fees left in the PayPal account.

If my recommendation is too labor intensive, take my suggestion to your accountant, and ask his recommendation on the next steps. I don't want you to completely re-work how you do things just so that it can meet the standards i work with (I work on the expectation that the books are the mirror image for exactly what happened in real life).

I hope this helps, if you need any step by step guides on doing this just let me know.

Thanks,

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JamesC · ‎September 14, 2018

Hi Diversity62,

Thanks for your post, welcome to the UK Community Page for QuickBooks Online.

Normally, what we would always recommend is using the PayPal account as an asset or bank account, and whenever you record your invoices/sales receipts as paid, you'd record directly to PayPal (Deposit to PayPal). This would give you an amount of money on your Balance sheet sitting within PayPal. Lets use your example: £17.99 recorded as paid to PayPal Account

We'd then recommend recording your expenses for PayPal as coming out of the PayPal Asset (Bank) Account. £0.81 Expense to PayPal Expenses (Or your fees expense account) recorded as paid by PayPal Account

This would leave the net pay balance as sitting in the PayPal Account. You'd then Transfer this amount to the Bank account, allowing you to correctly match to the payment. £17.18 Transferred from Paypal to Bank Current Account

My Recommendation depends on how labor intensive it will be to fix, how many transactions do you have? My recommendation would be to go through all the transactions that have been marked as paid to bank account directly, change that as paid to PayPal, and from there, you can transfer the correct amounts from PayPal to Current Account, leaving only the amount you need to expense out as fees left in the PayPal account.

If my recommendation is too labor intensive, take my suggestion to your accountant, and ask his recommendation on the next steps. I don't want you to completely re-work how you do things just so that it can meet the standards i work with (I work on the expectation that the books are the mirror image for exactly what happened in real life).

I hope this helps, if you need any step by step guides on doing this just let me know.

Thanks,

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