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Level 1

Recording paypal payments

I have just taken my first paypal payment linked to my quickbooks account.

The problem I have is that the invoice has been automatcially deposited (see pic below)


Screenshot 2024-07-01 9.11.05 PM.png 

Now I have the transaction showing as I have transferred the funds from paypal into my business bank account but can't link it to the invoice as it's already been categorized automatically (see pic below) it also has the fee deducted off. 


Screenshot 2024-07-01 9.10.38 PM.png 

How do I record this payment and link it to the invoice and include the fee ?


QuickBooks Team

Recording paypal payments

Thank you for raising your concern on the QuickBooks Community page, @RobB81I can see that you're new to accepting payments using PayPal, and I'm here to guide you through recording these transactions in QuickBooks.


Once your customer pays you through the PayPal app, QuickBooks will automatically create the invoice payment and link it to the transaction. This is why they are marked as deposited in the Invoices list, eliminating the need for you to record and link payments to invoices manually.


Please note that PayPal deducts fees from all payment transactions, which will be reflected in your Chart of Accounts. This explains why these fees aren't included in the downloads on the Banking page. PayPal fees are also automatically recorded in the expense account you've set in your PayPal settings.


Moreover, how PayPal transactions are posted in QuickBooks depends on your integration settings. With regard to the downloaded payment, you can match it to your invoice if they have the same amount.


For additional reference, check out this article: Accept Card Payments with PayPal app in QuickBooks Online.


To review which account the PayPal payment was deposited, you can follow these steps:


  1. Go to the Transactions menu and select Invoices.
  2. Look for the invoice with the Deposited or Paid status.
  3. Click the drop-down list under the Action column and select View activity.
  4. Under the Paid section, click the View payment link.
  5. You can check the account under the Deposit To drop-down list.


Additionally, allow me to share the following articles to help track your financial records accurately in QBO: 



Feel free to reach out if you have more questions or need further assistance recording PayPal payments. I'm here to help.

Level 1

Recording paypal payments

So can I just exclude this transaction still showing as the invoice has already been automatically deposited ?


Screenshot 2024-07-01 9.10.38 PM.png

QuickBooks Team

Recording paypal payments

 I appreciate you coming back and confirming your PayPal payments, RobB81.


Yes, you can exclude that PayPal transaction since QuickBooks categorise these payments automatically. If you need to record the fee, you can enter it as an expense account.


Here's how:


  1. On the left navigational bar, go to the Transaction tab.
  2. Select Chart of Accounts and then click the New button.
  3. Enter the Account name.
  4. In the Account Type section, choose Expense and complete the necessary fields.
  5. Once you're ready, click the Save and Close button.


Here's how to record the fees:


  1. Select + New, then select Expense.
  2. Choose  the payment processor from the Payee dropdown
  3. In the Category column, choose the expense account to record the fee and enter the amount.
  4. Select Save and close.


Also, you can check these articles to learn more about how to manage accounts in your COA, manage bank transactions, and reconcile an account inside QBO:



We look forward to having you here again if you need assistance recording PayPal payments.  I'll promptly lend a hand.

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