Paypal fee headache...

Hi Fabioganga,

Welcome to the QuickBooks Community & thank you for your message!

Sorry to hear that you are experiencing issues with your Paypal transactions onto your QuickBooks account.

In order to record these transactions accurately and make sure the money deposited into your bank account matches the transactions in QuickBooks Online, we need to use two transactions and two accounts.

Firstly, we need to use either a Sales Receipt or Receive Payment transaction to record the full customer payment and deposit this amount to the Undeposited Funds account on the day the transactions occurred.

Secondly, when you transfer the funds from PayPal, you will need to create a Bank Deposit transaction to move the funds from Undeposited Funds to the Bank Deposit in QuickBooks Online, and enter the processing fee as a minus figure on the Bank Deposit.

To give you a hand with this, you can refer to our Community article How to enter a credit card payment with associated fees when using non QuickBooks merchant services. This gives you a step by step guide to doing this and once saved, you will then be able to match this Bank Deposit to your online banking feed should you have this connection within the Banking screen.

Let me know if you have any queries. Or, if you'd like to go through this over the phone, you can call our dedicated team who will be happy to assist you. Our contact details can be found here along with our opening hours.

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Please do not hesitate to contact us if you require further assistance and we will gladly help.

Kindest regards & hope you have a lovely day!

Thanks so much @KatieLou for your reply.

It seems pretty much a complex procedure to me, quite laborious I'd say, I will look into it.

What I used to do when I was with Kashflow was simply create a negative transaction directly in the Paypal account (without the need to create a separate bank account) and then just log a purchase receipt against that expenditure like "fee on invoice # xyz". Problem sorted easily.

Cannot a similar approach be used instead without having to create a separate bank account just for the fees?

The problem is that Paypal fee is not able to discriminate between the amount paid by the customer and what has been physically received as the fee is not logged by Paypal as a separate transaction (as it should be) but rather as a deduction of the same transaction ID and this complicates things when having to record them in our books.

Consider also that I handle HUNDREDS of micro transactions each month, so having to follow a complex procedure based on two accounts isn't something I look forward to doing, to be honest... that is why I am wondering if there may be a simpler approach like what I used to do with Kashflow.

Ideally the Paypal feed should be modified in a way that it detects the fee when importing the transaction list and then creates a separate transaction as an expense that could easily then match an expense receipt created ad hoc.

Please, I'd appreciate your comments on this.

Also, you do mention a Community Article "ow to enter a credit card payment with associated fees when using non QuickBooks merchant services". Thanks for this. Do you have a link for it, please?

Kind Regards,
Fabio
 

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@fabioganga wrote:

A customer pays £ 7.32 

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I thought this "new" (downgraded) Community Q&A was for the USA only.  Are you in the USA using multi-currency?

No, I'm sorry I am in the UK.

I wasn't aware when posting that this community is US only.

My apologies... yet my question still stands :-)

Kind Regards, Fabio

Hi Fabioganga,

I'm wanting to check something about the information you've got feeding into your books at the moment.

Can i confirm something, do you have "PAYPAL" as a feed in your Banking section?
Do you also have your actual Current Account as a feed in your banking section?

I can tell you with confidence that the PayPal system doesn't have the functionality to create the expense through the banking system for you while dealing with an income transaction, especially as we only present the information we are provided with through the connection; we don't modify that raw data in any way.

You can suggest this as a functional change to the product through our feedback site which is https://feedback.qbo.intuit.com/

Thanks,

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@fabioganga wrote:

 

My apologies...

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No apology needed. I was just curious.

If you can get the free Connect to Paypal app in the UK, then that makes things a lot easier, as it will automatically post the fee, as a separate transaction, when you click Add in For Review, i.e. it adds 2 transactions; one for the gross and one for the fee

Thanks @Malcolm Ziman ,

however the whole point for me to ask the question is that it doesn't do that at all in my case, or at least not in all cases as it should.

I am now reviewing the information on this thread with my accountant too to find the best way to record such fees.

Kind Regards,

Fabio

Hey @fabioganga,

Can i confirm something, do you have "PAYPAL" as a feed in your Banking section?
Do you also have your actual Current Account as a feed in your banking section?

Thanks,