I just received a PayPal Working Capital loan. What is the best way to record loan payments that are taken out of every sale processed through PayPal?
I just received a PayPal Working Capital loan. PayPal will take a % of sales until the amount borrowed (plus the finance fee) is paid back. My retail sales are processed through PayPal and I use the PayPal app in QB for automatic reconciliation with my PayPal account. I set up an "Other Current Liabilities" account for the loan. What is the best way to record loan payments that are taken out of every sale processed through PayPal?
In QuickBooks Online (QBO), you can track loans by creating by creating a liability account.
If the loan is to be repaid within the current fiscal year, you can set up an Other Current Liability account. However, if the loan will continue to be repaid after the current fiscal year, I suggest creating a Long Term Liability account.
On the other hand, if you connect your PayPal account with QBO through bank feeds, you can categorize and match your transactions from there. Otherwise, you can refer to this article that'll help you get a better idea on how to record your transactions using the Sync with PayPal app.
Feel free to consult an accountant if you're unsure on how to record these transactions in QuickBooks.
Fill me in you have other questions about recording loan payments, kate. Thanks.